Mumbai: The Reserve Bank of India (RBI) on Wednesday said that almost all the high denomination currency notes invalidated as part of the governments crackdown on black money in November 2016 were deposited back into the banking system.
After nearly two years of intense scrutiny and verification, RBI in its annual report stated that the total specified bank notes (SBN) returned from circulation is Rs 15,310.73 billion, which is 99.3 per cent of Rs 15.4 trillion demonetised on November 9, 2016. An amount of Rs 10,720 crore in demonetised currency notes were not returned as of June 30, 2018.
The government’s initial assumption was that about 25-30 per cent of the cash in circulation would be unaccounted money and will not return to the formal banking channels.
“The SBNs received were verified, counted and processed in the sophisticated high speed CVPS for accuracy and genuineness and shredded and briquetted in the Shredding and Briquet-ting system. The processing of SBNs has since been completed at all centres of the Reserve Bank. The total SBNs returned from circulation is Rs 15,310.73 billion,” RBI said in its 2017-18 annual report.
The process involved working in two shifts under strenuous conditions, maintaining detailed records and planning effectively without compromising on other functions of currency management, RBI added.
The total expenditure incurred on printing new currency notes during the last two fiscal years stood at Rs 12,877 crore (Rs 4,912 crore in FY18 and Rs 7,965 crore in FY17).
The value of banknotes in circulation increased by 37.7 per cent over the year to Rs 18,037 billion as at end-March 2018. In value terms, the share of Rs 500 and Rs 2000 banknotes, which had to-gether accounted for 72.7 per cent of the total val-ue of banknotes in circulation at end-March 2017, increased to 80.2 per cent as at end-March 2018.
Meanwhile, economic affairs secretary Subha-sh Chandra Garg said demonetisation was able to curb terrorist financing and promote digital payments. Now, the system now has about Rs 3-4 lakh crore less currency than it would have been if the system would have continued in the old manner, he said. “We have said in the past also I think demonetisation has achieved its objectives quite substantially.”
Reacting to the RBI report, former finance minister P. Chidam-baram said: “So, government and RBI actually demonetised only Rs 13,000 crore and the country paid a huge price. Over 100 lives were lost. 15 crore daily wage earners lost their livelihood for several weeks and GDP was hit by Rs 2.25 lakh crore in one year.”