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Sulastri

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Published on: 15 Jun 2017 by sulas3

SBI says demonetization affecting Indian Economy adversely

State Bank of India, India's largest bank,
has expressed its fear on demonetization that demonetization
has a negative effect on India's economy
, which has a very bad effect on
business. On November 9, 2016, the Indian government changed the notes of the
old 500 and 1000 and instead replaced the new 500 and 2000 notes to the
country.

      

This decision of the Indian Government has
shaken the entire economy of India. The market is declining day by day,
inflation is on the rise and people are facing gains in inflation. State Bank
has cleared that small businessmen are having trouble getting note captive. SBI
has also said that Banco's business has been very impressed with
demonetisation.

 

After demonetization, the amount
accumulated in the current and savings account has increased sharply. According
to a report by the Reserve Bank of India, after the Demonetization, the
increase in the deposit of 4.10 percent to 39.30 percent in the part of the
CASA deposit resulted in a reduction in the cost of the total deposits and the
banks reduced their term deposit rates. As a result, SBI and other
public-sector banks are getting a good competition from commercial banks. SBI
has also pointed out that due to the increasing competition, banks have a very
negative impact on net interest margin and other earnings. If SBI and other
government banks do not compete, then these banks may have to face losses.

 

"The
move could also result in an increase in compliance costs and higher incidents
of fraud. Any one or more of these events, if and when they occur, could have a
material effect on the bank's business, results of operations, financial
conditions as well as reputation," the document said. 

For more important
information & news related to State Bank of India & Its Subsidiary
branches you can visit the tutorial website - http://sbiseva.com/

Tags:

Indian bank

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