Almost a year after demonetisation RBI says still verifying returned notes
Almost a year after Prime Minister Narendra Modi announced demonetisation, the Reserve Bank of India said that the Rs 500 and Rs 1,000 bills returned to banks are still being “processed in all earnest” through a sophisticated currency verification system.
In reply to an RTI query, the central bank said it has processed about 1,134 crore pieces of Rs.500 notes and 524.90 crore pieces of Rs. 1,000 junked notes, having a face value of Rs. 5.67 lakh crore and Rs. 5.24 lakh crore respectively, as on September 30.
Following Prime Minister Narendra Modi’s surprise announcement of the invalidation of old high-value currency notes on 8 November, estimates suggested that around Rs 3 trillion would not return to the banking system because it was unaccounted or black money. While defending demonetisation in the Supreme Court in November, then attorney general Mukul Rohatgi said around Rs 4-5 trillion would probably not find its way back into the system.
By December, though, it was clear that tax evaders had managed to legalize their unaccounted money using mules and proxies to make deposits, made high-value purchases using back-dated bills and colluded with bank officials to exchange old currency.
Defending demonetisation, Jaitley said its major objectives— a “less cash economy”, digitization, formalisation of the economy, widening the tax base, curbing terror financing, tracking black money, and clamping down on counterfeit currency—had been met.
“The effect of demonetisation in all these areas have been extremely positive,” he added.
As on November 8, 2016, there were 1,716.5 crore pieces of Rs 500 and 685.8 crore pieces of Rs 1,000 notes in circulation, totalling Rs 15.44 lakh crore, it had said.
“Subject to future corrections based on verification process when completed, the estimated value of specified bank notes received as on June 30, 2017, is Rs 15.28 trillion,” RBI had said in the annual report.
While the counterfeit currency notes made for a paltry number, RBI, after the exercise of demonetisation, shelled out Rs 7,965 crore on printing new Rs 500 and Rs 2,000 bills and notes of other denominations, more than double the Rs 3,421 crore spent in the previous year, it said.