Over 99 Per Cent Banned Notes Back In System, Says RBI Report: 10 Facts

Demonetisation was hailed as a step that would curb black money, corruption and check counterfeit currency but according to the RBI, fake notes in banned Rs 500 and Rs 1,000 decreased by 59.7 and 59.6 per cent.

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Demonetised notes worth Rs 15.31 lakh crore have been returned, an RBI report said

New Delhi:  Over 99 per cent of Rs 500 and Rs 1,000 notes banned by Prime Minister Narendra Modi in the November 2016 demonetisation have returned to the banking system, the Reserve Bank of India said today after completing what it calls the "humungous task" of counting the banned cash. The central bank's annual report says only a fraction of the currency was left out of the system after the unprecedented notes ban aimed at checking black money and corruption - an exercise that cost the government Rs 8,000 crore. The opposition Congress promptly said the PM must "apologise" for lying to the nation.
Here are the top 10 developments in this big story:
  1. RBI's report said of the Rs 15.41 lakh crore worth of 500 and 1,000-rupee notes taken out of circulation through demonetisation on November 8 2016, notes worth Rs 15.31 lakh crore have been returned. This means Rs 10,720 crore of the junked currency did not return to the banking system.
  2. Despite demonetisation squeezing out hard cash from the economy, household cash savings rose to 2.8 per cent of national income -- the highest in six years, the preliminary data released by the RBI shows.
  3. The cost of the entire exercise of demonetization and new notes was Rs 8,000 crores, said Economic Affairs Secretary SC Garg.
  4. The banned cash deposited by the public was verified, counted and processed in the sophisticated "high speed currency verification and processing system" for accuracy and genuineness and then shredded, said the central bank.
  5. The value of banknotes in circulation stands at Rs 18 lakh crore till the end of the last fiscal, having increased by nearly 38 per cent. A collateral damage because of the rise in printing and other costs is "dividend RBI pays to the government", said the report.
  6. The government replaced old Rs 500 notes with new ones, but Rs 1,000 notes have not been replaced. Instead, new Rs 2,000 notes were introduced.
  7. The RBI spent Rs 7,965 crore on printing new Rs 500 and Rs 2,000 and other denomination notes, more than double the spending on cash in the previous year. In 2017-18, the central bank spent another Rs 4,912 crore on printing of currency, the annual report said.
  8. Demonetisation was hailed as a step that would curb black money, corruption and check counterfeit currency but according to the RBI, fake notes in banned Rs 500 and Rs 1,000 decreased by 59.7 and 59.6 per cent.
  9. In a series of tweets, former Finance Minister P Chidambaram said the country paid a "huge price" for demonetizing what turned out to be "a small sum". Mr Chidambaram said for Rs 13,000 crore, which did not come back to the banks, the country lost Rs 2.25 lakh crore worth of GDP, crores of jobs and over a hundred lives. "I suspect that the bulk of the Rs 13,000 crore is currency in Nepal and Bhutan and some that was lost or destroyed," he commented.
  10. The Congress said last year, PM Modi had said on Independence Day that more than Rs 3 lakh crore unaccounted money would come back to the system. "Modiji, will you apologise for that lie now? (The) RBI report again proves that demonetisation was 'Modi-made disaster' of epic proportions," said Congress's Randeep Surjewala.


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