99.3% demonetised notes were returned, says RBI

NEW DELHI: The Reserve Bank of India (RBI) has conceded for the first time that almost all the banknotes invalidated in November 2016 have returned to it in the form of deposits, handing the Opposition fresh ammunition to target the government ahead of a string of state polls leading to the 2019 Lok Sabha elections.

Prime Minister Narendra Modi rendered invalid ₹500 and Rs1,000 notes worth ₹15.44 lakh crore by value from the midnight of November 8-9, 2016, in an unprecedented move the Bharatiya Janata Party (BJP)-led government described as a crackdown on black money, or untaxed, unaccounted cash stashed away by dishonest individuals, terror financing and counterfeit currency.

In its latest annual report released on Wednesday, RBI said as much as 99.3% of the junked banknotes by value, or ₹15.3 lakh crore, had returned to the banking system, confirming what had been widely perceived by economists and banking experts a long time ago: that much of the money had found its way back or that some individuals had found ways of laundering their black money.

Senior Congress leader and former finance minister P Chidambaram fired the first shot in a new political slugfest triggered by the long-pending report, released after a painstaking audit of the banknotes that were returned by citizens who had been given until the end of 2016 to deposit old high-value notes in their possession.

“So, government and RBI actually demonetised only ₹13,000 crore and the country paid a huge price,” Chidambaram said in a Twitter post. “Over 100 lives were lost. 15 crore daily wage earners lost their livelihood for several weeks. Thousands of SME (small and medium enterprise) units were shut down. Lakhs of jobs were destroyed.”

The reference to lives lost was to the purported deaths of people who had to queue up at bank branches for hours together in the days following demonetisation. The central bank took nearly two years to calculate and destroy the banned notes. The tedious process included day and night shifts, working 6 days a week and using 15 note-counting machines. “The processing of SBNs (Specified Bank Notes) has since been completed at all centres of the Reserve Bank,” the RBI declared in its report.