Hyderabad/MUMBAI: State Bank of India (SBI), the largest public sector lender in the country, on Friday said it has received nearly Rs 40,000 crore as deposits in the last two days following the government’s decision to demonetise Rs 500 and Rs 1,000 notes. “What I do in a month, I've done in a day," said SBI chairman Arund-hati Bhattacharya, giving out the details of the influx of low-cost deposits in current accounts and savings accounts.
She further said that the strong growth in deposits would bring down the cost of capital for banks. Along with it, the resulting disinflationary environment would pave the way for lending rates to fall in coming months. According to industry sources, all banks put together must have collected deposits worth over Rs 2 lakh crore in the last two days.
Demonetised notes in circulation are worth over Rs 14 lakh crore. If people are holding this entire sum legally, then banks will get back Rs 14 lakh crore by March 31, 2017 — the final deadline set by the government. However, if banks and post offices don’t get this amount, the balance would be presumed to be unaccounted money which got flushed out of the system.
Under the new interest rate mechanism — marginal cost of funds based lending rate (MCLR) — devised by RBI, lenders must quickly reflect deposit rates in their lending rates. So the low lending rate is just a matter of time. Apart from this, banks cannot keep the huge cache of cash ideal. They will have to make the cash work. So they have to find borrowers, by cutting lending rate. Lower lending costs will help companies to better their profitability and in turn improve investment appetite. The bank has also exchanged currency notes worth Rs 1,666 crore in last two days.
Centre gets tough on illegal conversion, forces on alert:
Income-tax, enforcement directorate and excise departments have started massive crackdown on people trying to convert unaccounted demonetised currency. One of the major targets of the investigative agency are jewellers, bullion and foreign currency traders across country. ED on Friday conducted surveys on 67 forex dealers for checking possibility of illegal money change in lieu of old currency. ED is looking into foreign exchange violations and money laundering by prominent money exchanges across the country, said revenue secretary Hasmukh Adhia.
Excise officials too have summoned details of sale of the gold and ornaments from over 600 jewellers across 25 cities. The officials of Direc-torate General of Central Excise Intelligence (DGCEI), an intelligence arm under the finance ministry, has sent notices to these jewellers seeking details of the gold sales in the past four days, beginning November 7. They have been asked to give details like quantity of stock held by them and sales made during these days. Teams of DGCEI officials are also visiting major jewellery stores and their manufacturing units to serve notices seeking these details. Jewellers in major cities like Delhi, Mumbai, Kolkata, Chen-nai, Ahm-edabad, Beng-aluru, Hyde-rabad, Bho-pal, Vijayawada, Nashik and Lucknow are initially under the scrutiny of the DGCEI officials.
The income-tax department detected unexplained cash and sales worth Rs 100 crore in its crackdown on Friday. I-T department conducted searches at multiple shops and trade counters in Delhi, Bengaluru, Kolkata and Mumbai and has made an inventory of excess cash and sale documents at these locations. The finance ministry has written to police and paramilitary forces to check the movement of huge cash, particularly demonetised notes.
