Nearly 99% of demonetised money returned: RBI

Mumbai, August 31

All but 1.4 per cent of the old Rs 1,000 notes that were scrapped in November last year have come back into the banking system, the Reserve Bank of India said in its report on Wednesday.

In its annual report for 2016-17, the RBI has said that it got back Rs 15.28 lakh crore of the Rs 15.44 lakh crore that it had scrapped  — nearly 99 per cent of the money it declared invalid. 

The report also said that the central bank has yet to get back 8.9 crore of 632.6 crore pieces of old banknotes of Rs 1,000 that were in circulation.

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The RBI said until March 31, 2017, the country had 588.2 crore banknotes of Rs 500 — both old and new — in circulation, as against 1,570.7 crore on March 31, 2016.

The cost of printing banknotes had doubled to Rs 7,965 crore in FY'17 from Rs 3,421 crore in FY'16 because of the cost incurred in printing new banknotes after old high-value banknotes were declared invalid, the bank said, adding that 7.62 lakh pieces of counterfeit money was detected in FY'17, against 6.32 lakh in FY'16.

The central government had announced in November that it was immediately scrapping old high-value banknotes of Rs 500 and Rs 1,000 in what it said was an attempt to root out illegally acquired money in the country. It then introduced new notes of Rs 500 and a new denomination — Rs 2,000 — but did not re-introduce Rs 1,000.

READ: Jaitley defends note ban; says critics don’t understand system

It also gave time for the old notes to be deposited in banks — resulting in long queues outside banks in November and December — and said that unusually large deposits would be closely watched.

The bank recently introduced another new denomination — that of Rs 200 — into the banking system.

'Disaster'

Senior Congress leader P. Chidambaram on Wednesday hit out at both the government and the RBI, as he called the decision a “shame”.

In posts on Twitter soon after the central bank’s report made headlines, the former finance minister said: “99% notes legally exchanged! Was demonetisation a scheme designed to convert black money into white?"

Rs 16000 cr out of demonetised notes of Rs 1544,000 cr did not come back to RBI. That is 1%.

"RBI 'gained' Rs 16000 crore, but 'lost' Rs 21000 crore in printing new notes! The economists deserve Nobel Prize."

Other leaders of the party were just as scathing: Congress spokesperson Randeep Surjewala called the exercise a "disaster" and a “massive folly” that cost 104 innocent people lives.

"Utterly failed #Demonetisation is nothing but a disaster in which 104 innocent people were killed while 'Corrupt' made 'Windfall Gains'.

"Demonetisation Scam,not only dented institutional sanctity of RBI,but also credibility of India abroad.PM should apologise to the nation," he said in a series of tweets.

"Rewind: Modiji's obfuscation exposed once again. On Ind. Day, PM claimed to have unearthed Rs 3 Lakh crore black money post demonetisation."

"Perspective: This Rs 16000 crore is just 1 pc of the total notes demonetised," he said.

"Dr Manmohan Singh predicted that #Demonetisation will reduce GDP by 2% and it did. Only the Economy suffered due to this massive folly!" 

A report by the Reserve Bank of India said on Wednesday that it got back Rs 15.28 lakh crore of the Rs 15.44 lakh crore that the central government had invalidated in November last year.

Prime Minister Narendra Modi had announced that the central government was scrapping old banknotes of Rs 500 and Rs 1000 in an attempt to "root out black money" in the country and stem funding to terrorist activities.

The decision had invalidated close to 85 per cent of the cash in circulation, and had sent crores of people across the country scurrying to banks. 

 PTI/Agencies