Lok Sabha Question No. 346 (UNSTARRED), answered on 2017-02-03
Subject: Demonetisation Effect on Financial Markets
Ministry: FINANCE
Asked by: POONAMBEN HEMATBHAI MAADAM

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 346

TO BE ANSWERED ON FEBRUARY 3, 2017 / MAGHA 14, 1938 (SAKA)

## 'DEMONETISATION EFFECT ON FINANCIAL MARKETS'

## 346: SHRIMATI POONAMBEN MAADAM

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government move to demonetize high value currency infuse more formal savings into the financial markets instead of dead assets, if so, the details thereof;
- (b) whether the demonetization drive has given a boost to the Government's financial inclusion drive thereby pushing more households towards efficient banking and payment infrastructure, if so, the details thereof; and
- (c) whether the Government has communicated to SEBI to prepare for a higher role in the months to come as the size of India's capital market is set to expand significantly?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI ARJUN RAM MEGHWAL)

- (a) The data for premiums collected by the Life/ Non-Life insurers for Nov/ Dec 2015  and  2016  indicates  that  there  is  no  adverse  impact  on  Life  insurance  new business, which has posted growth of 18% in Dec 2016 over Dec 2015. Similarly, the Non-Life premiums have grown by 25.5% in Dec 2016 over Dec 2015. The year to date premium figures for three quarters up to Dec 2016 for both Life and NonLife insurers also indicate a growing trend. New business premiums of Life insurers have grown 36% and Non-Life premiums have witnessed a surge of 31% in Dec 2016 (upto third quarter) over Dec 2015.

The trends in Mutual Fund Investment during the period August 2016 to December 2016 are as follows:

## Trend of Investment in Mutual Funds since August 2016 to December 2016

| Month     | Gross Inflow during the month (Rs. In Crore)   | Net Inflow during the month (Rs. In Crore)   | Asset Under management (AUM) as on the end of the month (Rs. In Crore)   |   Month on Month increase/ (decrease) (%) |
|-----------|------------------------------------------------|----------------------------------------------|--------------------------------------------------------------------------|-------------------------------------------|
| Aug-2016  | 14,30,717                                      | 25,333                                       | 15,63,177                                                                |                                      2.97 |
| Sept-2016 | 13,92,626                                      | 16,071                                       | 15,80,076                                                                |                                      1.08 |
| Oct-2016  | 13,60,994                                      | 32,334                                       | 16,28,976                                                                |                                      3.09 |
| Nov-2016  | 13,99,419                                      | 36,020                                       | 16,50,011                                                                |                                      1.29 |
| Dec- 2016 | 14,14,031                                      | 10,924                                       | 16,46,337                                                                |                                     -0.22 |

- (b) The data on payment system indicators such as Paper Clearing, Retail Electronic Clearing (primarily NEFT and IMPS) , UPI, USSD, Card Transactions at POS, PPI in December, 2016 indicates the following trend(details in Annexure);-
- Paper Clearing, Retail Electronic Clearing (primarily NEFT and IMPS)-considerable growth in December, 2016 as compared to October and November, 2016
- UPI, USSD- considerable growth in November and December, 2016 as compared to October, 2016
- Card transactions at POS- considerable growth in November and December, 2016 as compared to October
- PPI- considerable growth in December, 2016 as compared to October and November, 2016
- (c) No  specific  directions  have  been  communicated  to  SEBI  by  the  Government. However, SEBI and Government, together, are very well prepared and equipped to perform any challenging role in the times to come, as we have adopted and put in place best systems and practices to regulate and develop India's Securities market.