Aggregate bank deposits slump in fortnight to November 19 after abrupt rise in previous 15 days: Report

The massive fortnightly spike in bank deposits by a whopping Rs 3.3 lakh crore — the fifth biggest rise in 24 years — for the fortnight to November 5, 2021, and a subsequent plunge of Rs 2.7 lakh crore in the next fortnight can be due to the expected IPO boom and subsequent poor show in the later weeks, argues an SBI Research report. Such a massive deposit accretion has never happened during a Diwali week as there is always a currency leakage and concomitant deposit decline, says an SBI Research report, adding this is also the fifth largest increase in any fortnight in the past 24 years since 1997 and the Rs 2.69 lakh crore subsequent deposit slump for the fortnight to November 19 is the largest since 1997. Such a huge incremental addition has happened only a few times: during the fortnight to November 25, 2016 by Rs 4.16 lakh crore after the note ban, for the fortnight to September 26, 2016 by Rs 3.55 lakh crore, March 29 2019 by Rs 3.46 lakh crore and April 1, 2016 by Rs 3.41 lakh crore, said the report.

While November 2016 was due to the demonetisation and the March and April of the same year could be attributed to seasonal year-end bulge, Soumya Kanti Ghosh, the chief economic adviser to the State Bank Group, said in a note on Friday.

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