RBI demonetisation data: 99% of Rs 500, Rs 1000 notes were returned to banks

 BT Online        Last Updated: August 30, 2017  | 20:06 IST
RBI annual report: 99% of Rs 500, Rs 1000 notes were returned to banks after demonetisation

Reserve Bank of India (RBI) on Wednesday released its annual report which gave out figures on Rs 500 and Rs 1,000 demonetised currency notes that came back to the system.

RBI data put out today revealed that out of the Rs 15.44 lakh crore of notes taken out of circulation, Rs 15.28 lakh crore has returned to the system and around Rs 16,000 crore is yet to be deposited back to the banks.

The total expenditure incurred on printing stood at Rs 7,965 crore for the current year as against Rs 3,420 crore during 2015-16. The rise in cost of printing was due to introduction of new currency notes after demonetisation, RBI said.

The RBI report said that about 8.9 crore units of the demonetised Rs 1,000 notes worth Rs 8,900 crore, had not come back into the system. There were 632.6 crore pieces of Rs 1,000 currency notes in circulation on the day of demonetisation. This reveals  that just  1.4 per cent of Rs 1000 notes did not return after demonetisation.

Finance Minister Arun Jaitley held a press conference and defended government's demonetisation exercise, saying the real objective of demonetisation was less-cash economy, digitisation, increased tax base and crackdown on black money.  

Taking note of RBI's data on demonetisation, former Finance Minister P Chidambaram tweeted, "RBI 'gained' Rs 16000 crore, but 'lost' Rs 21000 crore in printing new notes! The economists deserve Nobel Prize." 

The report also revealed that only 0.002% of old Rs 500 notes were found to be fake.

In value terms, the share of 500 and above banknotes, which had together accounted for 86.4 per cent of the total value of banknotes in circulation at end-March 2016, stood at 73.4 per cent at end-March 2017, RBI report said. 

The share of the newly introduced Rs 2,000 notes in the total value of banknotes in circulation as at March-end was a little more than 50 per cent, it added.

On November 8, Prime Minister Narendra Modi had announced demonetisation move to crackdown on black money and to curb cash transactions.

 

What the RBI did right after demonetisation?

The RBI has given an account of the immediate action it took to remonetise the economy after the Prime Minister made the demonetisation announcement on 8th November. The RBI has said that 86 per cent of value of notes in circulation was withdrawn from the system.  "The  Reserve  Bank  subsequently shifted  to  making  available  banknotes  generated from printing presses to currency chests and from there to bank branches and ATMs in the shortest possible  time," it added. 

Between November 9 to December 31, the RBI pumped in 23.8 billion pieces of bank notes into circulation aggregating Rs 5,540 billion in value. 

"The pace of remonetisation continued ceaselessly thereafter also and the notes in circulation as on March 31, 2017 increased close to 74 per cent of the notes in circulation  prevailing on November 4, 2016," it added.