99.3% Of Demonetised Currency Back In System: RBI Report

29 Aug 2018 1:22 PM GMT
99.3% Of Demonetised Currency Back In System: RBI Report
Image Credits: The Indian Express

Nearly 99% of the ₹500 and ₹1000 that were demonetised on the night of November 8, 2016, have now returned to the banks, says the Reserve Bank of India (RBI) in its annual report, released on Wednesday.

The RBI says most of the demonetised currency is back, indicating that just a minuscule percentage of currency was left out of the system after BJP government’s call for unprecedented note ban aimed at curbing black money and corruption.

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. The RBI in its annual report for 2017-18 said that the “exercise is finally over”.

How much money is back?

According to the report, out of the Rs.15.41 lakh crore of Rs. 500 and Rs. 1,000 notes in circulation post demonetisation, almost Rs.15.31 lakh crore notes worth have been returned. Which means, just a sum of Rs. 10,720 crore of the baned currency did not return to the banking system.

After the midnight stroke by Prime Minister Narendra Modi, the invalid notes called specified bank notes, were allowed to be deposited in banks across the country with significant deposits coming under income tax scrutiny.

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 official data given by the RBI, the value of banknotes in circulation has increased by 37.7% over the year to ₹18,037 lakh crore as at end-March 2018.

Post demonetisation, new currency of Rs 500 notes was pumped more into the system over the last one year. The share of Rs 2,000 notes by value has declined to 37.3% as on March 2018 as compared to 50.2% a year ago.

While the share of Rs 500 note, in terms of value, has increased from 22.5% to 42.9% during the same period, reported the Hindu.

Money spent by RBI post demonetisation

The RBI has also revealed that post demonetisation, RBI has spent Rs 7,965 crore in 2017-18 on printing new Rs. 500 and Rs. 2,000 and other denomination notes. However, this is more than double the amount of Rs. 3,421 crore that was spent in the previous year (July 2016 to June 2017).

Collateral damage as a result of the rise in printing the notes and other cost was dividend RBI pays to the government.

Backfire by Chidambaram

After the RBI report, former finance minister and Congress leader P Chidambaram lashed out over the decision to announce demonetisation.

It took nearly two years for RBI to complete the tasks of processing and verifying banned currency notes, its annual report showed.

While many hailed demonetisation as a step that would curb black money, corruption and check counterfeit currency but RBI said, “Counterfeit notes detected in specified bank notes decreased by 59.7 and 59.6 per cent in the denominations of Rs. 500 and Rs. 1,000, respectively.”

Also Read: After 21 Months Of Demonetisation, 18,135 SBI ATMs Still Can’t Dispense New Notes: RTI Reply

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The Logical Indian

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The Logical Indian

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