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Ecowrap - Incorporating Retail Digital Transactions Into Money Supply Measurement: SBI Research

Ecowrap - Incorporating Retail Digital Transactions Into Money Supply Measurement: SBI Research

<div class="paragraphs"><p>Quick respond  codes for Bharat Interface for Money, left, and PayTM online payment at a roadside food stall in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)</p></div>
Quick respond codes for Bharat Interface for Money, left, and PayTM online payment at a roadside food stall in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

SBI Research Report

India currently compiles four monetary aggregates on the basis of the balance sheet of the banking sector in conformity with the norms of progressive liquidity:

M0 (monetary base), M1 (narrow money), M2 and M3 (broad money), which are used in monetary policy making decisions.

As per the definition, M0 is the monetary base and its components can never change.

M3 (broad money), is defined as the total stock of money (paper notes, coins and demand deposits of bank) in circulation which is held by the public and this measurement needs to change in line with emerging trends.

In the post demonetisation period, the digital money (pre-paid instruments) has got a push and reached Rs 21,509 crore in May 2021.

Simultaneously, there has been a massive surge in UPI payments and it has touched Rs 41 lakh crore in FY21.

Click on the attachment to read the full report:

SBI Research Ecowrap .pdf

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