Arundhati Bhattacharya, Chairman, State Bank of India, said the bank saw deposits of close to ₹1.20 lakh crore in the last fortnight following the withdrawal of the ₹1,000/500 notes.
“The inflow is huge, but not all of it will remain with the bank. Only 10-15 per cent of this is expected to remain and the rest will go back because they were in the economy. However, it would be difficult at this juncture to envisage how much will remain. This money may not go out as cash but as transfer transactions because this was the working capital in the economy. Only that amount which was lying in people’s cupboard or something of the sort will stay with the bank and that in our estimation could be 10-15 per cent,” she said in reply to a query. On issues relating to shortage of ₹100 and the new ₹500 note, she said: “currency is available. But people are not keen to spend. They are rather more concerned about exchange and depositing of the invalid notes.”
She admitted that the lack of the new ₹500 denomination note was an issue, but the supply has since been strengthened by the RBI.
“This would be solved in a few days. As of Wednesday, State Bank of India had calibrated 60 per cent of its ATMs. The rest will be done within the next five days. The new ₹500 currency is being made available in Chennai from today; Coimbatore will get it soon enough,” she said.
She said the bank’s topline growth will be affected this quarter because of the demonetisation drive. “We had quite of bit coming back into loan accounts — some good ones, some categorised as “stressed”, but credit growth had also taken a hit as people have not been able to focus much on loan disbursal. When topline shrinks, the NPA numbers as a percentage would go up. This is especially so this quarter and more so in the next as economic activity is impacted.”
She said this phase was a temporary one and people will be compelled to alter their business models, “which could be less cash”.
“How this would impact asset classification is difficult to say at this juncture,” the SBI chief said, adding “we hope this would be short-lived.”