Demonetisation impact can be seen in the coming quarters, while the remonetization process will get a complete in 2-3 months duration said RBI deputy governor Viral V Acharya.

Ultimately, the cash shortage is like the liquidity shock and unless it had led to a substantial wealth destruction one would expect its effects to be quite temporary. You would expect the effects to be temporary, he said

There may be a couple of sectors, like 2-wheeler sales, which will be slow slightly in growth, he said.

He further said that the impact of the note ban will be temporary and it is to bring the informal sector into the mainstream widening the financial inclusion process. The demonisation of high-value currency notes of Rs 500 & Rs 1000 led to the outflow of Rs 15.4lakh crore from the economy.

The newly appointed Deputy Governor also said that asset quality review (AQR) is on the track.

The RBI had set a deadline of March 2017 for completion of AQR exercise for the public sector banks.

It had embarked on the AQR exercise from December 2015 and asked banks to recognise some top defaulting accounts as NPAs. It has had a debilitating impact on banks' numbers and their stocks. 

The move resulted in a spike in bad assets with lenders recognising over Rs 1 lakh crore of bad assets in the December quarter alone.

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