Where in India did people deposit their cash?
In the quarter when demonetisation was announced and implemented, variance was seen among both states and districts on their share and pace of increase in incremental deposits.
The India picture
The flow of deposits into the banking system kept increasing even after the demonetisation period ended. In the quarter to December 2016, when demonetisation was announced and implemented, Rs5,23,350 crore of incremental deposits came into the banking system. Despite 86% of the currency being called back, the quantum of additional deposits was lower than the quarter preceding demonetisation (July-September 2016). The net inflow turned negative only in the April-June 2017 quarter.
The state picture
A state skew is seen in the incremental deposits during the demonetisation quarter (October-December 2016). Five states—Uttar Pradesh, Gujarat, Rajasthan, West Bengal and Punjab—accounted for 57% of incremental deposits, at a time when their share of total deposits was around 25%. The surprises were Maharashtra and Delhi, which are the two largest states by share of deposits: 22% and 10%, respectively. Yet, neither figured among the top 10 states by incremental deposits. Maharashtra, in fact, saw deposit inflow into scheduled commercial banks shrink by 5.8% in the December quarter. One reason for this could be that the data does not include numbers from cooperative banks, a segment of banks the central bank placed restrictions on in terms of accepting or exchanging old notes.
The district picture
Variance was seen in growth in incremental deposits in the December quarter among the 640 districts that make up India (as the maps show). As many as 368 districts registered a quarter-on-quarter increase of 10-20%. But there were 86 districts where the increase was above 20%. The alongside table shows data for the 20 districts that registered the highest quarter-on-quarter increase in the December quarter. In the following quarter (January-March 2017), most of them saw deposits shrink, which suggests money came in and went out.
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