Published: Thu, August 31, 2017
Global Media | By Garry Long

99 per cent of banned notes are back in system: RBI

99 per cent of banned notes are back in system: RBI

As the Reserve Bank of India on Wednesday said that 99 per cent of scrapped Rs 500 and Rs 100 notes returned to system post demonetisation, former Finance Minister P. Chidambaram asked the government if demonetisation was "a scheme to convert black money into white".

After Prime Minister Narendra Modi banned Rs 1000 and Rs 500 notes, the whole country has been under currency crisis.

The total circulation of 500 and 1000 currency notes prior to demonetization was estimated to be around 15.50 lakh crore.

The brand new Rs 1000 currency notes are printed by printing presses at Mysore and Salboni with improved security features. On the contrary, RBI spent Rs 7,965 crore on printing new currency notes in 2016-17. Currently, these two high-denomination currency notes make up for more than 70% of all currency in circulation by value, RBI data showed.

The RBI also said that the value of banknotes in circulation declined by 20.2 percent during the year to Rs 13.1 lakh crore, reflecting the impact of demonetisation.

How have, in value terms the Rs 500 and Rs 2,000 banknotes fared?

In the process of remonetisation, the RBI issued new Rs 500 notes. "The economists deserve Nobel Prize", Chidambaram said.

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Soon after the demonetisation announcement, the government had said that the Rs 1,000 notes will be reintroduced with new colour.

The central bank has been tentative in releasing data on the currency received, stating that the number is only an estimation.

RBI announced Rs 50/-, 200/- notes already on August 25. "Was demonetisation a scheme created to convert black money into white?".

He also said that the demonetisation scam not only dented institutional sanctity of the RBI, but also credibility of India overseas and demanded an apology from the prime minister.

Provisionally, all that the government had gained due to demonetisation turned out to be Rs 16,050 crore, which have not returned to the banking system.

Jaitley further said that India was predominantly a cash economy and that condition needed to be altered to give a blow to black money.

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