KOLKATA: The recent policy reforms including demonetisation and the introduction of Goods & Service Tax (GST) are likely to incentivise a larger shift to financial savings from physical savings , a research paper published by Reserve Bank of India said.The weakness in real estate activity and moderation in housing prices have also slowed down investment in physical savings and help channel funds into financial savings. "An important positive impact of demonetisation has been to induce a shift towards formal channels of saving by households. During demonetisation and the subsequent period, there has been a distinct increase in saving flows into equity/debt oriented mutual funds and life insurance policies," the RBI paper on “Financialisation of savings into non-banking Financial Intermediaries” said. "The recent deceleration in inflation, as also, inflation expectations, has had the effect of raising real incomes and returns for households, which may provide further impetus to financial savings," it said.RBI has published it as part of its new research series called ‘Mint Street Memos’ (MSM). In nominal terms, excess deposits work out to ?

Source: Economic Times August 11, 2017 15:00 UTC