Over 99% of demonetised notes were returned: RBI

RBI says 99.3% demonetised notes were returned major points from central bank's annual report

RBI says 99.3% demonetised notes were returned major points from central bank's annual report

Of the Rs 15.41 lakh crore worth Rs 500 and Rs 1,000 notes in circulation on 8 November, 2016, when the note ban was announced, notes worth Rs 15.31 lakh crore have been returned.

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

Banks received Rs 15.31 lakh crore or 99.3% of the Rs 15.41 lakh crore worth Rs 500 and Rs 1,000 notes that were in circulation on November 8, 2016 - the day when the note ban was announced, according to the RBI.

Political parties were quick to corner the BJP-led Narendra Modi government that demonetised high-value currency notes to curb black money.

Bharatiya Janata Party spokesperson Sambit Patra said black money found an address due to demonetisation, carried out in November 2016, and prompted the government to bring over 18 lakh suspect bank accounts under scrutiny.

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Former chief statistician of India, Pronab Sen didn't express any surprise at the news about 99.3 per cent demonetized currency returning in the banking system and said that it was "expected".

Now, even if 100% of demonetised currency returned to the system, it does not mean all of this cash was "white" or money that was generated through wholly legal means. It was said that this amount would be over Rs 3 lakh crore.

"The total SBNs returned from circulation is Rs 15,310.73 billion", the RBI said in its report. At a press conference on Wednesday evening, senior finance ministry official Subhash Chandra Garg refused to elaborate on how demonetisation helped crack down on black money. But the goal posts kept shifting in the weeks and months since with the government citing several reasons to demonetise high value notes such as to choke terror funding, bribery, increasing tax base and checking counterfeit notes.

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.

Thousands of SME units were shut down, lakhs of jobs were destroyed and the Indian economy lost 1.5% of GDP in terms of growth, Chidambaram said in another tweet. Meanwhile, the central bank may soon come up with varnished notes to increase their lifespan, which would not only reduce replacement requirement but would also save the central bank from security printing expenditure. However, the supply of banknotes was lower than the previous year.

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