The second fortnight of September saw Rs 3 lakh crore of time deposits, something unique, followed by liquidation of Rs 1.2 lakh crore of these right after.
New Delhi: From September 16 to 30, a staggering Rs 3.03 lakh crore of time deposits – fixed and recurring – were made at banks. This has never happened in any fortnight since January 2001.
September 16 is also the date from which the Reserve Bank India (RBI), in a rare later decision, chose to implement an incremental Cash Reserve Ratio rule of 100%, retrospectively. RBI said this was done to impound additional cash flowing into banks, assessing the impact of demonetisation, which was announced only on the night of November 8.
Clearly, then, RBI was aware that enough deposits – liquidity in bank parlance – were available with banks from September 16.
What is also intriguing is that in the fortnight after September 30, as much as Rs 1.2 lakh crore of time deposits were liquidated. This is again unprecedented. More, these liquidated deposits do not show up in saving or current accounts in the fortnight report of October 14. In fact, these latter deposits also dipped by Rs 1.22 lakh crore over the same fortnight.
To understand this, Business Standard sent detailed queries to the ministry of finance and RBI, on these series of exceptional deposits and withdrawals. Neither replied.
Some official explanations have come. Yet, some senior economists and bankers have asked either for investigations or more factual detail.
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