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The cat is finally out of the bag vis-a-vis the scrapped banknotes that were turned in during the currency demonetisation in November 2016. Close to 99.40 per cent of the specified banknotes (SBNs) — of ₹500 and ₹1,000 denomination — which were scrapped were returned to banks’ coffers, according to Reserve Bank of India’s annual report.
The report pegged the total SBNs returned at ₹15,31,073 crore. On November 8, 2016, when the demonetisation was announced, currency notes of ₹1,000 and ₹500 denomination, valued at ₹15,40,000 crore, which accounted for 86.9 per cent of the value of total notes in circulation, were scrapped.
The Modi government had framed the dramatic announcement as a move to clamp down on corruption and black money, cut off terrorist financing and tackle fake notes. But with almost all the demonetised notes coming back, experts wonder whether the stated purpose of demonetisation has been served.
However, Subhash Chandra Garg, Secretary, Department of Economic Affairs, said, “In terms of black money, terrorist financing, fake currency, digital payments... I think demonetisation has achieved its objectives quite substantially.” The RBI report said that during the year, 27.7 billion pieces of banknotes were disposed of as against 12.5 billion pieces the previous year, mainly on account of the accelerated processing of SBNs of ₹500 and ₹1,000 denominations.
The RBI said the value of banknotes in circulation increased by 37.7 per cent over the year to ₹18,03,700 crore as at end-March 2018. The volume of banknotes, however, increased by 2.1 per cent.
In value terms, the share of ₹500 and ₹2,000 banknotes, which had together accounted for 72.7 per cent of the total value of banknotes in circulation at end-March 2017, increased to 80.2 per cent as at end-March 2018.
The share of newly-introduced ₹200 notes in the total value of banknotes in circulation was 2.1 per cent as at end-March 2018. In volume terms, ₹10 and ₹100 notes accounted for 51.6 per cent of the total banknotes in circulation as at end-March 2018 as compared to 62.0 per cent at end-March 2017.
Counterfeit notes
During the reporting financial year, 522,783 pieces of counterfeit notes were detected in the banking system, which was 31.4 per cent lower than in the previous year.
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