99% of de­mon­e­tised notes re­turned, says RBI re­port

Con­fis­ca­tion of money was never the ob­jec­tive of the exercise: Arun Jait­ley

The Hindu - - FRONT PAGE -

MANOJIT SAHA The Re­serve Bank of In­dia’s an­nual re­port has fi­nally re­vealed that as much as ₹15.28 lakh crore of the high-value cur­rency that was de­mon­e­tised in Novem­ber re­turned to the cen­tral bank.

“Sub­ject to fu­ture cor­rec­tions, based on the ver­i­fi­ca­tion process when com­pleted, the es­ti­mated value of SBNs [spec­i­fied bank notes] re­ceived as on June 30, 2017, is ₹15.28 tril­lion,” the RBI said in a re­port released on Wed­nes­day.

In­tense scru­tiny

The cen­tral bank was un­der in­tense scru­tiny since Jan­uary — af­ter the win­dow for de­posit­ing the with­drawn ₹500 and ₹1,000 ban­knotes had closed — for de­tails on the ex­tent of cur­rency that was re­turned to the RBI in the wake of the gov­ern­ment’s sud­den de­ci­sion to with­draw high-value ban­knotes as a means to com­bat­ing coun­ter­feit­ing, black money and the fi­nanc­ing of ter­ror­ist ac­tiv­i­ties.

The lat­est RBI data showed that 98.96% of the with­drawn cur­rency — at the time of de­mon­eti­sa­tion the value of old ₹500 and ₹1,000 notes in cir­cu­la­tion was ₹15.44 lakh crore — was de­posited with the banks.

Sep­a­rately, the data showed that the share of the newly in­tro­duced ₹2,000 ban­knotes in the to­tal value of cur­rency in cir­cu­la­tion was 50.2% at end-March 2017.

Fi­nance Min­is­ter Arun Jait­ley said on Wed­nes­day that the con­fis­ca­tion of money was never the ob­jec­tive of the de­mon­eti­sa­tion exercise. “That peo­ple have been com­pelled to de­posit even black money into banks is it­self a good ev­i­dence of its [suc­cess].”

Mr. Jait­ley said that the high growth in in­come tax re­turns and the ro­bust GST in­flows in­di­cated that more and more peo­ple now pre­ferred to un­der­take ‘white money’ trans­ac­tions.

“With RBI dis­clos­ing the numbers of re­turned notes today [Wed­nes­day] and the mea­sure hav­ing been suc­cess­fully im­ple­mented, the de­bate should be over,” said Eco­nomic Af­fairs Sec­re­tary Sub­hash Garg. Mr. Garg called for a con­clu­sion of note-ban linked ar­gu­ments as the “short-term neg­a­tive im­pacts on eco­nomic ac­tiv­ity had played out fully and long-term pos­i­tives will con­tinue to strengthen fun­da­men­tals.”

The fi­nal de­posit fig­ures could still rise since on June 20, 2017, the gov­ern­ment al­lowed Dis­trict Cen­tral Co­op­er­a­tive Banks to de­posit the with­drawn notes that had been ac­cepted by them from cus­tomers be­tween Novem­ber 10-14.

The cen­tral bank also said it was in dis­cus­sion with the gov­ern­ment whether to ac­cept the de­mon­e­tised notes held by cit­i­zens and fi­nan­cial in­sti­tu­tions in Nepal. Data in the an­nual re­port showed that only 89 mil­lion pieces of ₹1,000 were not de­posited.

As of March 2016, there were 6,326 mil­lion pieces of ₹1,000 ban­knotes in cir­cu­la­tion. In 2016-2017, an­other 925 mil­lion pieces of ₹1,000 notes were sup­plied into the sys­tem by the cur­rency print­ing presses.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.