Demonetisation May Impact Bank’s Profits

The State Bank of India (SBI) said that for demonetisation it is likely to continue slowing down the nation's economy while negatively i...

The State Bank of India (SBI) said that for demonetisation it is likely to continue slowing down the nation's economy while negatively influencing its business, reported by Press Trust. In its Preliminary Placement Document to investors, pointed its concerns and possible risks before its INR 15,000 Crores share sale through private placement. The statement says that the demonetisation has and may continue to result in slow down of the Indian economy, which may adversely affect the banking business. The document says that there was an increase in the number of new current account and savings accounts deposits in banks. The bank expresses concerns that SBI risked facing increased competition from commercial banks and other lending institutions with a chance of losing out on profits if it fails to compete.

After its merger with five of its associates and the Bharatiya Mahila Bank in April, SBI rose to join the world's top 50 banks from its 2016 position of 55. The Centre had demonetised INR 500 and INR 1,000 notes in November-2016 as part of its crackdown against black money and corruption. The drive had led to a severe cash gnaw in the nation.