With an estimated about Rs 4 lakh crore coming into the banking system within a week of demonetisation, Moody's Investors Service today said the trend of significant inflows will continue for the next 3 to 4 weeks. 
However, Moody's opined that banks' deposit base will witness a sharp decrease when the present restrictions on cash withdrawals are lifted. The rating agency said bank deposits are likely to increase by about 1 or 2 percent compared to what they would have been before demonetisation. 
Moody's said the expectation of a relatively low level of increase is based on the assumption that the role of cash as a medium of transaction will not change materially in the near term. However, as the cash intensity of the economy minimises over the medium term, bank deposit levels may benefit in a more meaningful way. 
It said the withdrawal of these high-value notes may provide a strong impetus to greater use of the formal financial system for the intermediation of commercial transactions, especially in the retail segment. Moody's said it expects a significant proportion of first-time and very infrequent users to become more sticky customers of banks.

No Comments For This Post, Be first to write a Comment.
Leave a Comment
Enter the code shown:

Can't read the image? click here to refresh

Todays Epaper

neerus indian ethnic wear
Latest Urdu News

Which cricket team will win the IPL 2022?

Gujarat Titans
Lucknow Super Giants
Rajasthan Royals