Demonetisation Spurred Investments In Mutual Funds And Insurance Plans, Suggests RBI Study

Premium collected by life insurance companies more than doubled in November when demonetisation was announced. The study noted that most of these were single-premium policies where the amount is paid in lump sum rather than periodically. The total life insurance premia collected between November and June was 46.3 percent higher than the year-ago period at Rs 42,210 crore.

The study also showed that loan repayments, which had taken an immediate hit after the cash crunch, rebounded and were comfortably growing over the monthly average collection seen till October last year.

These developments may incentivise the greater shift from physical to financial savings, the study said, adding that a declining inflation would provide an impetus to financial savings.

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