Question

Why the demand deposits are accepted widely as a means of payment? (3 mark question)

Answer 1

While data on what exactly banks are doing with the money they have accumulated is not out yet, daily data put out by the Reserve Bank of India (RBI) suggests an interesting insight. Photo: PTI


With the country’s largest lender, State Bank of India, itself having collected Rs1.27 trillion in cash deposits in the first nine days after the prime minister’s announcement, the total amount of cash deposited in the banking system is likely to be over Rs4 trillion. In fact, it has been estimated by the Indian Banks’ Association that this amount was collected by Tuesday itself.