- Currency in circulation has now soared to over Rs 19.3 lakh crore
- Total money supply (M3) stands at over Rs 140 lakh crore: RBI data
- During demonetisation, 98.96% of scrapped notes were returned to banks
The M3 includes currency with the public, deposit money of the public (demand deposits with the banking system plus 'other' deposits with the RBI) and the time deposits with the banking system.
This figure is equivalent to the net bank credit to the government, plus the bank credit to the commercial sector, plus net foreign exchange assets of the banking sector, plus government's currency liabilities to the public, minus the net non-monetary liabilities of the banking sector.
Currency In Circulation Hits Record Level. Ten Points
1. Currency with the public is arrived at after deducting cash with banks from total currency in circulation. This high level of currency available with the public is in sharp contrast to the reported cash crunch in various parts of the country a few months ago.
2. There has been a fear that hoarding or accumulation of large amounts of cash for various reasons could have triggered an artificial currency crunch.
3. The figures for both 'currency with the public' and 'currency in circulation' have also exceeded the levels seen before the government's demonetisation decision on November 8, 2016, that saw nearly 86 per cent of the currency in circulation at that time being invalidated overnight by scrapping the then Rs 500, Rs 1,000 banknotes.
4. The public was given time to deposit the invalidated notes in banks, which saw nearly 99 per cent of banned notes coming back into the system.
5. As per the RBI's latest disclosure in this regard, people had returned Rs 15.28 lakh crore as on June 30, 2017, of the Rs 15.44 lakh crore banned currency, or 98.96 per cent, of the scrapped notes to the banking system.
7. While the RBI is yet to announce its final word on processing and verification of all the returned notes, the latest 'money supply' data from the central bank puts the "currency with the public" at over Rs 18.5 lakh crore as on May 25, 2018 -- up more than 31 per cent from year-ago level. This is an over two-fold jump from Rs 7.8 lakh crore as on December 9, 2016 -- the lowest level it had seen after the announcement of the demonetisation decision as people rushed to deposit the scrapped notes with banks and the RBI.
8. Prior to demonetisation, the currency with the public stood at about Rs 17 lakh crore. In terms of 'currency in circulation', the RBI puts the latest figure at over Rs 19.3 lakh crore as on June 1, 2018 -- again a jump of about 30 per cent from the year-ago level, according to the 'reserve money' data released by the central bank.
9. This also marks an over two-fold rise from a low of Rs 8.9 lakh crore as on January 6, 2017 -- the lowest level it saw post-demonetisation. The current level of currency in circulation is also above the pre-demonetisation figure of Rs 17.9 lakh crore as on November 5, 2016. The RBI publishes the figures for currency in circulation on a weekly basis, while the currency with the public comes out every fortnight.
10. An analysis of historic data shows that the currency with the public stood at about Rs 13 lakh crore before the Modi government took charge in May 2014. It rose to over Rs 14.5 lakh crore in a year and then further to close to Rs 16.7 lakh crore by May 2016. The figure crossed Rs 17 lakh crore level by October that year, before starting to decline due to demonetisation. The figure again came back above Rs 10 lakh crore by February 2017 and crossed Rs 15 lakh crore mark in September last year. A similar trend was seen in the currency in circulation figure, which dropped sharply from November 2016 till early January 2017 due to demonetisation, before starting to go up. (With PTI inputs)
Get the latest election news, live updates and election schedule for Lok Sabha Elections 2019 on ndtv.com/elections. Like us on Facebook or follow us on Twitter and Instagram for updates from each of the 543 parliamentary seats for the 2019 Indian general elections.