99% of junked Rs 500/1000 notes returned to banks: RBI

As much as 99 per cent of the junked Rs 500 and Rs 1,000 notes have returned to the banking system, RBI said, prompting Opposition to question the efficacy of the government’s unprecedented note ban decision to curb black money and corruption.

The Reserve Bank, which has so far shied away from disclosing the actual number of junked currency deposited after November 8 last year, said in its Annual Report for 2016-17 that Rs 15.28 lakh crore of the junked currency had come back into the banking system, leaving only Rs 16,050 crore out.

As on November 8, 2016 there were 1,716.5 crore pieces of Rs 500 and 685.8 crore pieces of Rs 1,000 in circulation, totalling Rs 15.44 lakh crore.

Post-demonetisation RBI spent Rs 7,965 crore in 2016-17 on printing new Rs 500 and Rs 2,000 and other denomination notes, more than double the Rs 3,421 crore spent in the previous year.

The demonetisation was hailed as a step that would curb black money, corruption and check counterfeit currency but RBI said just 7.1 pieces of Rs 500 note per million in circulation and 19.1 pieces of Rs 1,000 notes per million in circulation were found to be fake in its sample survey.

Opposition was quick to seize on the data to attack the government with former finance minister P. Chidambaram saying, “RBI ‘gained’ Rs 16000 crore, but ‘lost’ Rs 21000 crore in printing new notes! The economists deserve Nobel Prize.”

“Rs 16,000 cr out of demonetised notes of Rs 15,44,000 cr did not come back to RBI. That is 1 per cent. Shame on RBI which ‘recommended’ demonetisation,” he tweeted.

Chidambaram also wondered if demonetisation was “a scheme designed to convert black money into white?”.

(Agencies)

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