Only Rs 75,000 cr in old notes still remains out of banking system: Report

With about Rs 14 lakh crore in old Rs 500 and Rs 1000 currency being  deposited with banks since November 8, 2016, only Rs 75,000 crore in demonetised currency remains to be out of the banking system, the Indian Express reported on Monday citing a top government official.

"We also now know for sure that another Rs 50,000 crore in old notes of Rs 500 and Rs 1,000 were already available with banks when Prime Minister Narendra Modi announced the decision to demonetise the high-denomination currency,” the official told The Indian Express.

As on November 8,  of approximately Rs 17.50 lakh crore currency in circulation, the Rs 500 and Rs 1,000 notes made up about Rs 15.50 lakh crore, or 88 per cent of the total.

With estimated Rs 14.50 lakh crore in Rs 500 and Rs 1,000 notes or 93.5 per cent of the total value of demonetised currency with banks now, the RBI has started the process of counting these to identify fake or counterfeit currency. The Reserve Bank of India (RBI) on Thursday clarified it was still counting how many old notes have been returned to the banking system, to eliminate double counting. Therefore, it said the numbers being quoted should not be construed as verified.

RBI is reconciling the numbers provided by banks against the actual cash stashed in currency chests. Media reports suggested that anything between Rs 14.5 lakh crore and Rs 15 lakh crore may have come back to the banking system, against Rs 15.4 lakh crore worth of old Rs 500 and Rs 1,000 notes.

The RBI states that as on December 10, Rs 12.44 lakh crore in old notes has been deposited/exchanged. Central officials have stated the figures are being collated and will be made public when the RBI is ready.   If RBI's figure of Rs 12.44 lakh crore as on December 10 was correct, then recent media estimates could be closer to the reality, given that there's still 20 days to go for the last leg of the demonetisation drive to end, economists say. 

On Wednesday, Finance Minister Arun Jaitley was vague when asked on the same at a press briefing after the goods and services tax council meeting. 

The government, on its part, has found it difficult to face the fact that most of the demonetised money has come back to the banking system. Finance Minister Arun Jaitley had hoped that a substantial portion of the demonetised amount won't come back to banks and, therefore, this can be extinguished from RBI's liability side and transferred back to the government. The figures being touted was about Rs 3 lakh crore in government gains through unreturned money. 

Predictably, economic affairs secretary asked the RBI to recheck the figures that it provided to eliminate possibilities of double counting.

Before that, State Bank of India chairman Arundhati Bhattacharya had hinted at a possible double counting on RBI's part as both cooperative banks that maintain accounts with banks and banks themselves reported their deposit numbers individually to RBI and the government. 

After the figures provided on December 13, RBI did not come up with any update on how much money has been returned. However, it periodically gave updates on how much money was remonetised, latest being Rs 5,92,613 crore till December 19. 

RBI said this time, the figures provided will be firm. "RBI is taking all steps to complete the process expeditiously so as to release firm figures of SBNs received at an early date."