According to Axis Bank Chief Economist Saugata Bhattacharya, the withdrawal of Rs 2,000 denomination notes will result in deposits of up to Rs 1.5 lakh crore for the Indian banking system. This move should increase overall deposit growth to over 11% by the end of FY24. Holders of the notes can deposit them at banks or exchange them over bank counters, which could contribute to the ‘war for deposits’ in the banking industry. Bhattacharya also expects credit growth to slow down to 13% in FY24, while deposit growth numbers will increase to 11-12% from the single-digit figure in FY23. Inflation is expected to be under control in FY24 as the RBI’s rate-setting panel is expected to maintain a status quo in rates at the next policy review. Bhattacharya predicts that the Monetary Policy Committee may cut rates in the fourth quarter of FY24.
Potential deposit of Rs 1.5 lakh crore likely from withdrawal of Rs 2,000 notes, says economist
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