In the Corona era, people are withdrawing money from savings and FD to meet the financial needs and to bear the expenses of treatment. Due to which their cash holding has increased.
FD fall
During the Corona epidemic, people increased their cash holdings to deal with the financial impact of the emergency. Now they are keeping money at home instead of banks. This is the reason that for some time there has been a huge decline in the number of FD holders. This was revealed in the quarterly report on deposits and credit statistics of scheduled commercial banks released by the Reserve Bank of India. According to RBI, from January to March, there has been a decline in the number of FDs in about 25 states out of 159 districts.
At least 15 out of 159 districts saw a decline in fixed deposits during two consecutive quarters during October-December and January-March last financial year. These 15 districts include four in Telangana, two in Andhra Pradesh and one each in Chhattisgarh, Nagaland, Arunachal Pradesh, Gujarat, Karnataka, Jammu and Kashmir, Assam, UP and Maharashtra. Apart from this, there was a decrease in the number of FDs in Bangalore Rural and Mumbai also.
Earlier, in the data released by RBI on May 28, it was also found that people’s cash holding has increased compared to last year. Between March 13, 2020 and May 21, 2021, the cash with the public increased by Rs 5.54 lakh crore and reached an all-time high of Rs 28.62 lakh crore.
According to bankers and economists, the reason for this increase is the need for people withdrawing money from savings and fixed deposits to meet their needs and medical emergencies to deal with the financial problem due to COVID and the lockdown imposed by the Center and the states. is.
An analysis of recent RBI data shows that out of 705 districts for which comparable data is available, 159 saw a decline in fixed deposits (FDs) in banks from 0.19 per cent to 67 per cent during the last quarter of 2020-21 . Their combined fixed deposits have come down by 5.86 per cent to Rs 14.06 lakh crore from Rs 14.94 lakh crore a year ago as compared to the corresponding period last year.
The sharpest decline in fixed deposits was recorded in Sheohar in Bihar (67 per cent) and lowest in Hoshangabad (0.19 per cent) in Madhya Pradesh. Deposits are divided into three categories in the RBI data. These include current, savings and fixed deposits. Of these, more than 55 percent of the total deposit amount. While the other two categories account for around 10 per cent and 34 per cent respectively.
In the January-March quarter of the last financial year, 91 districts recorded a decline in current deposits, which is much less than the 304 recorded in the same quarter of the previous financial year. During the January-March quarter of the last financial year, 13 districts saw a decline in savings deposits.
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