Emkay writes….The implication of rapidly rising proportion of currency holding (over Rs 19 lacs now, growing over 25% YoY) is a leakage from the banking system, resulting in sharp decline in money multiplier to 5.5%. This is contributing to decline in systemic liquidity, in addition to the impact of reduction in FX reserve by usd 23bn, YTD this year. This also signifies in the steep rise in the Credit deposit ratio of the banking system to 75.5%, even with a modest 12.5% growth in credit demand.
So net net, the decline in net household savings and rise in currency holding is a clear backdrop for rising rates scenario and gaining consumption demand.
https://indianexpress.com/article/business/economy/demonetisation-99-per-cent-banned-notes-back-rbi-report-5331825/