RBI annual report: 99% of demonetised currency back with central bank

The Reserve Bank of India on Wednesday revealed in its annual report that Rs 15.28 lakh crore, or 99 per cent of the Rs 15.44-lakh-crore scrapped currency notes, had come back to the central bank between the government’s demonetisation decision and June 30, 2017.

However, in what came as a surprise to many, the RBI report said that about 89 million units of the demonetised Rs 1,000 notes, worth Rs 8,900 crore, had not come back into the system. The share of the newly introduced Rs 2,000 notes in the total value of banknotes in circulation as at March-end was a little more than 50 per cent, the RBI annual report added.

Mentioning that the central bank spent Rs 7,965 crore on printing new currency notes in 2016-17, it said the overall currency in circulation into the system had come down by 20.2 per cent on a year-on-year basis as at the end of March.

In the biggest-ever demonetisation exercise India had seen, Prime Minister Narendra Modi on 8 November 2016 announced high-value currency notes of Rs 500 and Rs 1,000 would cease to be public tender. The move, to stem the circulation of black money and fake currency, and to choke terror funding and corruption, was to take effect within hours of the announcement.

The next few days saw serpentine queues at bank branches to deposit and exchange the demonetised banknotes. With people facing inconvenience, the government’s decision to ban old currency notes and handling of the whole process came under scrutiny. Reserve Bank of India (RBI) Governor Urjit Patel appeared before a probing parliamentary panel several times, but the total number of demonetised currency notes deposited in banks remained elusive for long. It was only in the Reserve

While there were several estimates and statements, the official numbers were not revealed until the RBI released its annual report on August 30.

Source: Business Standard