Talking of banks, CASA plays the most important role in the business books. CASA is nothing but an acronym for “ Current Accounts and Savings Account”. Interestingly, the meaning of the word “CASA” in Urdu is the utensil in which a "fakir" ( a Muslim ascetic) seeks alms. Current account is used for business transactions whereas savings account by individuals for purposes other than business. Current account remains very volatile whereas savings accounts are not to that extent. “CASA“ is the bread and butter for any bank. They are low cost deposits to bank. More the CASA of the bank, less the lending rates for customers. It is also the toughest business to generate for any bank although sounds like cracking a hollow paper ball. In doubt, please talk to any banker, frustration and plight will erupt in unimaginable ways, a caveat .
Without delving much into the intricacies of low cost funds, let us observe an intriguing data which is self-explicit and also open to individual interpretation based on political penchant.
The sum total of savings bank account deposits in the commercial banks (both Indian and Foreign ) in India was Rs.10,927 Crs in 1980-81. In other words, sum total of the money lying in all the savings bank accounts in India. The same increased to Rs.50501 Crs in 1990-91, Rs.222982 Crs in 2000-01 and Rs.137288 Crs in 2010-11 . In 2018-19 , as per the latest data available, the savings account deposit was whooping Rs. 4031177 Crs .
Here comes an interesting comparison between the figures of 2015-16 and 2016-17 ( the year of demonetization). As compared to 2015-16, balance in savings bank accounts grew by Rs.8,57,039 Crs ( 33% ), one of the highest since 1980. Where do these Rs 8.5 Lac crores came from ?
( Amount in Crs )
Source: RBI: Handbook of Statistics on Indian Economy 2018-19, Table 48
If that is not enough, let me corroborate the above hypothesis with another example i.e. increase in public provident fund receipts (PPF) for the year 2016-17.
(Amount in Crs)
Source: RBI: Handbook of Statistics on Indian Economy 2018-19, Table 1
The total receipts in 1980-81 was Rs.59 Crs, whereas in 2015-16 it rose to Rs.7791 Crs whereas the next year, the so-called year of currency bloodbath, the receipts ballooned to whooping Rs. 17,235 Crs, an increase of 121% . Is it not something bizarre that in savings bank deposit as well as public provident fund (PPF) cash is accepted and the spurt is highest in these two deposit avenues. Though these must not be construed as a yardstick to measure the pros or cons of demonetization.
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