DeMo led to 1 %age point dip in bank interest rates: PMO

New Delhi: Banks have lowered their lending rates by about 1 per cent post demonetisation, the Prime Minister's Office on Tuesday said, citing "multiple benefits" of the scrapping of old high-value currency notes. The government scrapped the old Rs 500/1,000 notes on November 8, 2016 and the holders were asked to deposit them with banks by December 30 that year. Although there was separate timelines for NRIs and those who were abroad during the period. On January 1, SBI surprised the markets by slashing the marginal cost of funds based lending rate by 0.9 per cent. Other banks followed suit. The outstanding demonetised notes as on November 8, 2016 were Rs 15.44 lakh crore. Of these, Rs 15.28 lakh crore or 99 per cent were returned, leaving only about Rs 16,000 crore outside the banking system.