Demonetisation: 99.3% of old notes now with banks, says RBI

Demonetisation: 99.3% of old notes now with banks, says RBI

Sen also called demonetisation a "failure", News18 reported.

The central bank said that it was estimated that Rs 15.41 lakh crore worth Rs 500 and Rs 1,000 notes were in circulation on November 8, 2016, of which Rs 15.31 lakh crore have been returned.

"This very large task of processing and verification of SBNs (specified bank notes) was successfully achieved with the coordinated efforts put in by the work force of the Issue Department of the Reserve Bank", said the report.

Niti Aayog member and senior economist Bibek Debroy indicated that approximately Rs 1.6 lakh crore - 10% of the demonetised currency - would be extinguished and not come back into the system.

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Post demonetisation, new currency of Rs 500 notes was pumped more into the system over the last one year. The withdrawal of notes had sparked an acute shortage of cash in India and hit the economic growth.

Demonetisation led to long queues outside banks.

Indians returned nearly the entire amount of currency withdrawn in the government's note ban of November 2016, raising fresh questions over the objective of a shock move that triggered a sharp slowdown in the economy.

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

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Now, even if 100% of demonetised currency returned to the system, it does not mean all of this cash was "white" or money that was generated through wholly legal means. "15 crore daily wage earners lost their livelihood for several weeks", he said. Thousands of SME units were shut down. "Lakhs of jobs were destroyed", he tweeted. Meanwhile, the central bank may soon come up with varnished notes to increase their lifespan, which would not only reduce replacement requirement but would also save the central bank from security printing expenditure. "The total SBNs returned from circulation is Rs 15,310.73 billion".

These estimates, it has not become clear, were wild guesses: the RBI has indicated that 99.3% of the demonetised currency or roughly Rs 15.31 lakh crore was returned. "Today, RBI in its annual report has vindicated our apprehension", Banerjee wrote on her Facebook page. "In consonance, the use of digital payments, which had surged to a peak in December 2016 in the aftermath of demonetisation, fell back to the elevated post-demonetisation trend before rising in recent months", the RBI notes. It was supposed to flush out black money and end corruption. Raising doubts about the entire demonetisation exercise, Mamata asked if it was a "scheme hatched to allow some black money holders to quietly convert their black money into white".

Prime Minister Narendra Modi stunned India with his so-called demonetisation campaign that he said aimed to uncover unaccounted wealth and counterfeit money.

Sen also mentioned the use of black money, he said that trade and money lending are the commonest ones.

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Over 2.09 lakh non-income tax filers filed their returns and there was an 18 per cent increase in tax revenue, he told reporters.

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