As per RBI data, the total value of Rs 2,000 notes in the system is Rs 3.62 lakh crore.
The move to withdraw Rs 2,000 denomination notes will yield deposits of up to Rs 1.5 lakh crore for the banking system, Axis Bank Chief Economist Saugata Bhattacharya said on Wednesday.
"Notes of Rs 1 lakh to Rs 1.5 lakh crore will come back into the system as deposits," Bhattacharya told reporters, adding that this should take the overall deposit growth to over 11 per cent in FY24.
As per RBI data, the total value of Rs 2,000 notes in the system is Rs 3.62 lakh crore.
Holders of the notes can either deposit the notes at banks, or get them exchanged over bank counters. It can be noted that the banking system has been passing through what some call as a 'war for deposits' at present, with a wide gap between the credit and deposit growth numbers.
Bhattacharya said he expects the credit growth to slow down to 13 per cent in FY24 from 16 per cent, even as the deposit growth number will rise to 11-12 per cent from the single-digit figure in FY23.
Meanwhile, Bhattacharya said Reserve Bank's rate-setting panel will continue with a status quo in rates at next week's policy review as inflation is ebbing and is likely to be under control in FY24.
He said the Monetary Policy Committee may cut rates in the fourth quarter of FY24 as the growth comes under pressure, and maintained its estimate for a 6 per cent growth which is below the RBI's 6.5 per cent estimate.
"There is no need for a rate cut...we expect MPC to maintain the pause next week," he told reporters in a virtual press conference ahead of the policy decision next week.
He said the bank's house view is for inflation to average at 4.8 per cent in FY24, which is well within the RBI's comfort band. The headline print for May will come at 4.3 per cent, he said.
The core inflation is proving to be more sticky and will average about 5.2-5.3 per cent in FY24, as against the lower figure on the headline consumer price inflation, he said.
The rate cut may also be prompted because of the wide gap between the inflation number and the policy repo rate, which stands at 6.5 per cent, he said.
Another important factor will be the US Fed's moves on rates, Bhattacharya said, adding that the lower quantum of rate hikes as compared to the earlier expectations of a more aggressive posturing will be of help to India.
The government will meet its budgeted fiscal deficit target for FY24, but the GST collections may come down by a little bit, Bhattacharya said.
The rupee will be averaging at 82 against the dollar in FY24, he said, adding that India should have a surplus of over USD 15 billion on the balance of payments front for the fiscal.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)