The Reserve Bank of India on Wednesday revealed in its annual report that Rs 15.28 lakh crore, or 99 per cent of the Rs 15.44-lakh-crore scrapped currency notes, had come back to the central bank between the government’s demonetisation decision and June 30, 2017.
However, in what came as a surprise to many, the RBI report said that about 89 million units of the demonetised Rs 1,000 notes, worth Rs 8,900 crore, had not come back into the system.
The share of the newly introduced Rs 2,000 notes in the total value of banknotes in circulation as at March-end was a little more than 50 per cent, the RBI annual report added.
Mentioning that the central bank spent Rs 7,965 crore on printing new currency notes in 2016-17, it said the overall currency in circulation into the system had come down by 20.2 per cent on a year-on-year basis as at the end of March.
In the biggest-ever demonetisation exercise India had seen, Prime Minister Narendra Modi on 8 November 2016 announced high-value currency notes of Rs 500 and Rs 1,000 would cease to be public tender. The move, to stem the circulation of black money and fake currency, and to choke terror funding and corruption, was to take effect within hours of the announcement.
The next few days saw serpentine queues at bank branches to deposit and exchange the demonetised banknotes. With people facing inconvenience, the government’s decision to ban old currency notes and handling of the whole process came under scrutiny. Reserve Bank of India (RBI) Governor Urjit Patel appeared before a probing parliamentary panel several times, but the total number of demonetised currency notes deposited in banks remained elusive for long. It was only in the Reserve
While there were several estimates and statements, the official numbers were not revealed until the RBI released its annual report on August 30. Here is a timeline of events since the announcement of the demonetisation decision:
November 9-10, 2016: Banks and ATMs remain closed to prepare for changes needed in the system after demonetisation. Govt had nnounced that any bank deposits of more than Rs 2.5 lakh would face tax and penalty.
November 14, 2016: Govt extends deadline for accepting scrapped notes for public utility and fuel payments until November 24. Queues get longer at ATMs. Cash withdrawal limit for current account holders increased to Rs 50,000 a week. Charges on ATM transactions waived until December 30. Cash crunch continues. Parliament House ATMs also run dry.
November 16, 2016: SBI says it collected Rs 1,14,139 crore in deposits in 7 days.
November 21, 2016: Banks report exchange/deposits from November 10 to November 18 amounted to Rs 5,44,571 crore – Rs 33,006 crore exchanged and Rs 5,11,565 crore deposited. They also report that the public withdrew Rs 1,03,316 crore from their accounts either over the counter or through ATMs.
November 24, 2016: Govt withdraws exchange of old currency notes and extends deadline for exemptions until December 15 midnight.
November 26, 2016: Deposits in Jan Dhan accounts soar sharply by around Rs 27,200 crore to Rs 72,834.72 crore in just 14 days.
November 27, 2016: Rs 32,631 cr deposited in post offices since the announcement of the demonetisation decision.
November 28, 2016: RBI says banks have got about Rs 8.45 lakh crore worth of scrapped notes
December 7, 2016: RBI Governor Urjit Patel says demonetisation was not done in haste. Note ban impact on GDP growth estimated at only 15 bps. RBI says Rs 11.55 lakh crore, or 76 per cent of junked notes, have come back into the system
December 13, 2016: RBI Deputy Governor R Gandhi says banks had collected Rs 12.44 lakh crore worth of deposits in banned notes until December 10.
December 19, 2016: RBI says in the remaining days of the month one could make deposits in Rs 500 and Rs 1,000 notes in excess of Rs 5,000 but only once for every account.
January 18, 2017: Governor Patel fails to answer queries on deposited banknotes. He, however, confirms RBI injected Rs 9.2 lakh crore worth of new currency notes into the banking system to help replace the banknotes banned in November.
March 10, 2017: RBI's Macroeconomic Impact of Demonetisation report says the precise estimate of currency returned to the banking system was not yet available as the reconciliation process was still on.
July 4, 2017: Supreme Court asks the government and RBI to consider granting a window to those who has not been able to exchange scrapped Rs 500 and Rs 1,000 notes for genuine reasons.
July 13, 2017: Governor Patel, appearing before the Finance Standing Committee of Parliament, says the notes deposited after demonetisation are still being counted
August 2, 2017: Finance Minister Arun Jaitley says RBI is in the process of counting scrapped currency notes and will come out with the final figures once the fake notes are weeded out.
August 11, 2017: Describing the impact of demonetisation on the Indian economy in the Economic Survey-II, Chief Economic Advisor Arvind Subramanian says there has been a 20 per cent reduction in cash in the economy.
August 12, 2017: A paper, ‘Demonetisation and Bank Deposit Growth’, says ‘unusual’ cash deposits in specific accounts that are usually less active is estimated at about Rs1.6-1.7 lakh crore.
August 15, 2017: In his Independence Day speech, PM Modi says demonetisation of old notes led to at least Rs 3 lakh crore of undeclared income coming into the banking system.
August 16, 2017: Congress accuses PM Modi of contrary stand on black money recovered. It says he first announced an additional Rs 3 lakh crore had been brought into the banking system, and then said about Rs 1,25,000 crore black money was recovered
August 27, 2017: Data put out by RBI on its website suggest that at least for the Rs 1,000 notes, almost 99% of the currency in circulation had come back into the banking system
August 29, 2017: Several members of a parliamentary panel seek re-drafting of the draft report on demonetisation as RBI is yet to provide some crucial details, including on the number of junked Rs 500/1000 notes.