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99.3 per cent of demonetised currency returned to banks: RBI

30 August, 2018, 09:33 | Author: Melinda Barton
  • Economy       Rs 13,000 crore – the amount of currency banks did not get back after demonetisation
       	        Mahua Venkatesh         29 August 2018

He referred to the annual report of the RBI a year ago which said at that time that most of the notes were counted but the process was not complete.

Before demonetisation, Rs 500 and Rs 1,000 notes accounted for 86% of the currency in circulation.

Verification and process in of the SBNs has been completed. "That alone was a loss of Rs 2.25 lakh crore [2.25tn] a year".

The RBI said that the "humungous task of processing and verification of specified bank notes was successfully achieved and the total specified banknotes returned from circulation is Rs. 15,310.73 billion".

According to NDTV, the RBI has taken an awfully long time to count the currency that was returned in the limited period, which was provided by the government to exchange or deposit the demonetised notes.

Of the 15.4 trillion rupees ($218 billion) of cash in circulation that was invalidated on November 8, 2016, the government estimated about 5 trillion rupees wouldn't be returned to banks because it was stashed illegally to avoid tax. However, small number of notes are still with law enforcement agencies.

Congress chief spokesperson Randeep Surjewala said the prime minister in his 2017 Independence Day speech had claimed that over Rs 3 lakh crore unaccounted money will come back to the system.

In reply to whether an MoU has been signed with Nepal and Bangladesh on the fate of the demonetised currencies lying in those countries, he said "there are some notes in Nepal in the central bank and in Bangladesh it is even lower".

While The Wire has over the last eighteen months reported and analysed how India's currency-in-circulation (CiC) and currency-to-GDP ratio has not changed drastically after demonetisation, the RBI's annual report provides further proof of how little things have changed. The volume of banknotes, however, increased by 2.1 per cent.

In March 2017, the share of Rs 500 and Rs 2,000 currency notes, in value terms, accounted for 72.7% of the total value of banknotes in circulation.

RBI says an amount of Rs 10,720 crore, representing the value of specified banknotes has not been paid on June 30, 2018, which is nowhere near the cost of the implementation and not worthy of the hardships faced by the people.

The report also shows that only 40% of the Rs 100 notes that were scheduled to be printed in 2017-2018 were supplied.

"Going forward, the up-tick in credit growth is likely to be supported by the progress" being made under the insolvency code to help address stress on balance sheets of both corporates and banks, recapitalization of public sector banks, and a positive outlook on the economy, the RBI said.



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