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Over 99% of demonetised notes were returned: RBI
Why in the news ?
- Over 21 months after Rs 500 and Rs 1,000 notes were withdrawn from circulation on November 8, 2016, the Reserve Bank of India (RBI) said that nearly all of that money has returned to the banking system.
Details
- The RBI has received Rs 15.31 lakh crore or 99.3 per cent of the Rs 15.417 lakh crore worth of notes which were in circulation as on November 8, 2016.
- This means that just Rs 10,720 crore of Rs 500 and Rs 1,000 notes failed to come back to the RBI, as against expectations that over Rs 3 lakh crore of black money would not return to the banking system.
- The RBI had introduced new Rs 500 and Rs 2,000 notes in place of the notes withdrawn from the system, but the pace of remonetisation was slow.
- The total expenditure incurred on security printing during the year (July 2017-June 2018) stood at Rs 4,912 crore, as against Rs 7,965 crore in 2016-17, the RBI said.
Consequences
- The sudden withdrawal of notes in 2016 had created a liquidity shortage, with long queues outside banks and people undergoing immense hardship across the country.
- It had also roiled the economy, with demand falling, businesses facing a crisis, and GDP growth declining close to 1.5 per cent.
- Many small units were hit hard, with many reporting huge losses even after nine months.
- However, Department of Economic Affairs Secretary said the demonetisation process has achieved its objectives of reducing black money, fake currency, terrorist financing and promoting digital transactions.
Source
The Hindu.