Demonetization may have harmed the businesses in the country especially in the unorganized sector but it proved a boon for the urban cooperative banks in general and that of Gujarat in particular.
According to Gujarat Urban Cooperative Banks Federation (GUJFED), cumulative deposits of 220 urban cooperative banks in the state touched Rs 50,715 crore at the end of March 2017, an unprecedented achievement, reports DNA.
Speaking on the issue Jyotindra Mehta who is also the president of GUJFED said ”The deposits of urban cooperative banks touched Rs 50,000 crore for the first time ever. Deposits rose by 26 per cent from Rs 40,183 crore at the end of the previous financial year”.
Mehta traced the unparallel growth in deposits to demonetization. “The surge was linked to demonetization,” he said. Mehta recounted the days of demonetization when people would queue up before urban cooperative banks either to deposit or exchange high-currency notes.
In comparison the growth in the deposits of commercial banks has been slow and has been pegged at 16 percent.
A report by the State Level Bankers’ Committee said that from Rs 5.38 lakh crore in March 2016, bank deposits touched Rs 6.24 lakh crore in March 2017.
”Demonetization aided banks in high accretion of deposits. Withdrawal of legal tender and subsequent caps on drawing of money left banks with additional deposits,” SLBC said in the report.
The number of branches of cooperative banks crossed 1,000 for the first time during the financial year, while the depositor base crossed 1 crore.