99.3% of demonetised currency returned to banks: RBI

99.3% of demonetised currency returned to banks: RBI

99.3% of demonetised currency returned to banks: RBI

The RBI's annual report on Wednesday found 99.3% of the money withdrawn from circulation had been returned to banks, indicating either there was less "black money" than expected, or that schemes to launder money were more successful than thought.

"Demonetization was a total failure", said Mohan Guruswamy, chairman of the Centre for Policy Alternatives in New Delhi and a former adviser to the Ministry of Finance.

Without elaborating further, Garg said that the government has achieved the targets it had set for the demonetisation drive, including checking black money, conterfeit currency and terror funding and encouraging digital transactions.

The new Rs 2,000 note - which was initially believed to have come printed with better security measures - was also not immune to counterfeit.

"Compared to the previous year, there was an increase of 35 per cent in counterfeit notes detected in the denomination of Rs 100, while there was a noticeable increase of 154.3 per cent in counterfeit notes detected in the denomination of Rs 50", RBI said adding that counterfeit notes detected in the new Rs 500 and Rs 2,000 notes during 2017-18 were 9,892 and 17,929 as against 199 and 638, respectively, during the previous year. The share of Rs. 500 notes, in terms of value, increased from 22.5% to 42.9% in the same period.

A collateral damage as a result of rise in printing and other cost was dividend RBI pays to the government.

"The total value of SBNs (Specified Bank Notes) in circulation as on November 8, 2016, post verification and reconciliation, was Rs 15,417.93 billion (Rs 15.44 lakh crore)".

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In 2017-18 (July 2017 to June 2018), it spent another Rs 4,912 crore on printing of currency, the annual report said. It is a natural process as the GDP grows, payment system grows, currency grows.

Post demonetisation, new currency of Rs 500 notes was pumped more into the system over the last one year. There was, however, a 2.1% increase in the volume of banknotes.

As of March 31, 2108, the CiC accounted for 101.8% of its pre-demonetisation level. "125 crore Indians, destroyed the Indian economy, demolished India's global image and brought absolutely no gain to the country", he said.

The cat is finally out of the bag vis-a-vis the scrapped banknotes that were turned in during the currency demonetisation in November 2016.

The annual report, curiously, also provides a glimpse of how attempts at remonetisation over the a year ago focused heavily on supplying the new Rs 500 and Rs 200 currency notes.

The move hit India's growth, driving it to a three-year low of 5.7 percent in the June quarter of 2017, with several small businesses shutting down and many labourers losing their jobs.

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