Almost 99% demonetised notes back in system: RBI
Mumbai: As much as 99 per cent of the junked Rs 500 and Rs 1,000 notes have returned to the banking system, RBI said on Wednesday, prompting the opposition to question the efficacy of the government's unprecedented note ban decision to curb black money and corruption.
The Reserve Bank, which has so far shied away from disclosing the actual number of junked currency deposited after November 8 last year, said in its Annual Report for 2016-17 that Rs 15.28 lakh crore of the junked currency had come back into the banking system, leaving only Rs 16,050 crore out.
As on November 8, 2016, there were 1,716.5 crore pieces of Rs 500 and 685.8 crore pieces of Rs 1,000 in circulation, totalling Rs 15.44 lakh crore.
Post-demonetisation RBI spent Rs 7,965 crore in 2016-17 on printing new Rs 500 and Rs 2,000 and other denomination notes, more than double the Rs 3,421 crore spent in the previous year.
The demonetisation was hailed as a step that would curb black money, corruption and check counterfeit currency but RBI said just 7.1 pieces of Rs 500 note per million in circulation and 19.1 pieces of Rs 1,000 notes per million in circulation were found to be fake in its sample survey.
The opposition was quick to seize on the data to attack the government with former finance minister P Chidambaram saying, "RBI 'gained' Rs 16000 crore, but 'lost' Rs 21000 crore in printing new notes! The economists deserve Nobel Prize."
Samajwadi Party leader Naresh Agarwal said his party would move a privilege motion against RBI Governor Urjit Patel for misleading a parliamentary panel on the issue.
RBI said just 8.9 crore pieces of Rs 1,000 notes or 1.3 per cent of the scrapped ones have not returned. It, however, did not give a specific number for the old 500 rupee notes.
"Subject to future corrections based on verification process when completed, the estimated value of specified bank notes (SBNs) received as on June 30, 2017, is Rs 15.28 trillion," the central bank said.
After the note ban, old notes were allowed to be deposited in banks, with unusual deposits coming under income tax scrutiny.
A collateral damage as a result of the rise in printing and other cost was dividend RBI pays to the government.
RBI said its income for 2016-17 decreased by 23.56 per cent while expenditure jumped 107.84 per cent.
"The year ended with an overall surplus of Rs 306.59 billion as against Rs 658.76 billion in the previous year, representing a decline of 53.46 per cent," it said.
It was a total flop show: Mamata
Kolkata: Chief Minister Mamata Banerjee has lashed out at Reserve Bank of India and the Central government after the central bank said nearly 99 percent of the old notes are back in their Annual Report.
Banerjee tweeted: "Is not the RBI's revelation this evening (Wednesday) on demonetisation pointing to a big scam?"
It may be recalled that within half-an-hour of Prime Minister Narendra Modi's note ban announcement on November 8, 2016, Banerjee had reacted sharply and said it would affect the country's growth badly and thousands of people will lose their jobs. In course of time, her apprehension came true and economists, both from the country and abroad, have criticised the note ban.
She tweeted: "Due to this notebandi the nation has lost Rs 3 lakh crore of GDP in the fourth quarter alone." She said hundreds lost their lives and crores of commoners including farmers, workers, those engaged in the informal sector, small enterprises and other most vulnerable sections of society suffered massive pain. She added: "Demonetisation was supposedly done to uncover several lakhs of crores of black money. And now what we have got is a big zero."
She questioned whether the system was "set up deliberately by the Central government to facilitate dealers of black money to convert black money into white in lakhs of crores." She demanded a thorough investigation into the matter.