Published: Thu, August 30, 2018
Money | By Ethel Goodwin

99.3% of demonetised currency returned to banks: RBI

99.3% of demonetised currency returned to banks: RBI

The central bank said that it was estimated that Rs 15.41 lakh crore worth Rs 500 and Rs 1,000 notes were in circulation on November 8, 2016, of which Rs 15.31 lakh crore have been returned.

His comments came after the RBI in its annual report said that 99.3 per cent of the Rs 15.3 lakh crore taken out of circulation in November 2016 has returned to the central bank. The SBNs received were verified, counted and processed in the sophisticated high speed CVPS (currency verification and processing system) for accuracy and genuineness, and shredded and briquetted in the shredding and briquetting system, it said.

SBNs refer to the demonetised old 500 and 1,000 rupee. The value of total banknotes in circulation increased by 37.7 per cent over the year to Rs 18-lakh crore in March 2018. Verification and process of the SBNs has been completed. "Remember who had said that Rs 3 lakh crore will not come back and that will be a gain for the government!", he said.

Stating that the country paid a huge price for demonetisation, he said: "Over 100 lives were lost, 15 crore daily wage earners lost their livelihood for several weeks".

The Modi government had listed curbing black money as the primary intention of the move, along with making India a less cash-based economy. For instance, the SBI's economic research department, headed by chief economist Soumya Kanti Ghosh, predicted that up to Rs 2.5 lakh crore wouldn't come back into the banking system.

Quoting RBI report, the Trinamool Congress supremo said 99.3 per cent of the demonetised money has come back to the banking system. Lakhs of jobs were destroyed.

"Whether demonetisation has failed or not depends on its objective".

The annual report, curiously, also provides a glimpse of how attempts at remonetisation over the previous year focused heavily on supplying the new Rs 500 and Rs 200 currency notes.

Without elaborating further, Garg said that the government has achieved the targets it had set for the demonetisation drive, including checking black money, conterfeit currency and terror funding and encouraging digital transactions. Over five lakh shell companies were closed down, he said.

Prime Minister Narendra Modi's decision to ban high-value currency notes of Rs 500 and Rs 1000, along with the introduction of the goods and services tax (GST) previous year, acted as a drag on the Indian economy.

In 2017-18 (July 2017 to June 2018), it spent another Rs 4,912 crore on printing of currency, the annual report said.

On account of demonetisation, 2016-17 was an exceptional year and the after-effects continued in 2017-18 as well, said the RBI report, adding that the overall indent for 2017-18 was higher by 9.1 per cent as compared to last year.

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