RBI annual report: 99.3% of demonetised currency returned to banking system

RBI annual report: 99.3% of demonetised currency returned to banking system

The share of Rs. 500 notes, in terms of value, increased from 22.5% to 42.9% in the same period. The task of processing SBNs was achieved with the co-ordinated efforts put in by the workforce of the Issue Department of the Reserve Bank, it added.

"The total SBNs returned from circulation is Rs 15,310.73 billion", the RBI said in its report.

While 6,453 pieces of fake Rs 50 notes were detected in 2015-16, this number jumped to 9,222 in 2016-17 and then increased to a whopping 23,447 in 2017-18. "Almost the entire amount came back, which showed that people were not hoarding money in cash".

The Congress on Wednesday demanded an apology from Prime Minister Narendra Modi, alleging he lied to the country over the demonetisation issue, after the RBI said nearly all the 500 and 1,000 currency notes scrapped in November 2016 returned to the banking system.

"That alone was a loss of Rs 2.25 lakh crore a year", he said.

The Reserve Bank of India finally revealed the quantum of notes that have returned into the system post the Demonetization.

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The RBI's annual report, however, indicates that demonetisation has not made a huge dent in this regard, as the proportion of high-value notes is marginally lower now than what it was pre-demonetisation.

The share of newly-introduced ₹200 notes in the total value of banknotes in circulation was 2.1 per cent as at end-March 2018. Growth has since rebounded to 7.7 percent in the quarter ended March 2018.

"The value of banknotes in circulation increased by 37.7 per cent over the year to Rs 18,037 billion at March-end 2018", it said. It is a natural process as the GDP grows, payment system grows, currency grows.

The figures suggest prime minister Narendra Modi's demonetisation policy, which likely wiped at least 1% from the country's GDP and cost at least 1.5m jobs, failed to wipe significant hordes of unaccounted wealth from the Indian economy - a key rationale for the move. Counterfeiters had also shifted to recreating smaller notes and were now able to replicate en masse the new 500 and 2,000-rupee notes, it said. "125 crore Indians, destroyed the Indian economy, demolished India's global image and brought absolutely no gain to the country", he said. At that time the demonised notes from Nepal and Bhutan were also yet to be counted.

Asked about reports of fake notes presented to the banks post-demonetisation, Garg said past year in a RBI report it was said, that all the notes were verified and the amount of fake notes was "minuscule and ignorable".

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