Banks garner Rs 12.44 lakh cr; Govt mulls lower tax rates

RBI on Tuesday said banks have garnered Rs 12.44 trillion (Rs 12.44 lakh crore) in banned notes till December 10, while they have issued Rs 4.61 trillion to them since the demonetisation drive began 35 days ago.

“The old notes of Rs 500 and Rs 1,000, which have been returned to the Reserve Bank and the currency chest, amounted to Rs 12.44 trillion as of December 10,” RBI Deputy Governor R Gandhi told reporters here.

The money that various banks have issued through their counters and ATMs since November 10 and up to December 10 stood at Rs 4.61 trillion, he added.

In volume terms the number stood at 21.8 billion pieces of notes of various denominations, of which 20.1 billion pieces were of Rs 10, Rs 20, Rs 50 and Rs 100. The number of higher denomination of new Rs 500 and Rs 2,000 notes stood at 1.7 billion, he said.

The Central Banker also asked banks to preserve CCTV recordings of operations at bank branches and currency chests to help law enforcement agencies in identifying people engaged in hoarding of new notes post demonetisation.

In a notification issued on Tuesday, said banks should “preserve CCTV recordings of operations at bank branches and currency chests for the period from November 8 to December 30, 2016, until further instructions”.

The central bank said the move will “facilitate coordinated and effective action by the enforcement agencies in dealing with matters relating to illegal accumulation of new currency notes”.

Meanwhile, Finance Minister Arun Jaitley on Tuesday hinted at lower direct and indirect tax rates in the future as demonetisation results in higher tax revenues from unaccounted wealth coming into system.

He also warned of a “very heavy price” that unscrupulous elements will have to pay for amassing large amounts of cash unlawfully, saying agencies are keeping a close eye on cash accumulations.

The November 8 announcement by government to demonetise high value notes has in one stroke junked 86 per cent of the currency in circulation and holders of the discontinued notes can deposit them in banks before the end of the year and withdraw money in new currency.

The money being deposited has to be accounted for and taxes paid - 50 per cent on voluntary disclosures of unaccounted money and 85 per cent for any failures.