About 89 million notes of Rs 1000 rupee currency have not come back to the system out of a total of 6700 million notes that were in the system as on November 8, according to data released by RBI.
About 89 million notes of Rs 1000 rupee currency have not come back to the system out of a total of 6700 million notes that were in the system as on November 8, according to data released by Reserve Bank of India (RBI) in its annual report. Only 1.3 percent of Rs 1000 notes didn't return after the demonetisation exercise.
Moneycontrol was the first to report on August 8 that the RBI's annual report that will be presented later this month may contain details about the volume and value of demonetised Rs 500 and Rs 1000 notes deposited between November 8 and December 30.
This is the first time the central bank is revealing details on the remonetised notes after the November 8, 2016 withdrawal of old Rs 1000 and Rs 500 currency notes was announced.
The central bank said that the value of notes in circulation was down 20.2 percent YoY to Rs 13.1 lakh crore till March-end from a year ago. On the other hand, volume of notes in circulation has increased by 11.1 percent.
RBI said it pumped in 2380 crore notes totalling Rs 5.54 lakh crore in the two months post demonetization between November 9 to Decemeber 31.
RBI 'gained' Rs 16000 crore, but 'lost' Rs 21000 crore in printing new notes! The economists deserve Nobel Prize.
— P. Chidambaram (@PChidambaram_IN) August 30, 2017
In 2016-17, the banking regulator who is in charge of printing currency notes has spent Rs 7,965 crore on printing them against Rs 3420 crore last year. A majority cost would include the printing of new Rs 500 and Rs 2000 denomination notes.
The net expenditure on liquidity operations stood at Rs 17,426 crore in FY17, the annual report added.
In value terms, the share of Rs 500 and above banknotes stood at 73.4 percent compared to 86.4 percent before demonetization, the release said.
While the share of Rs 2,000 banknotes in the total value of banknotes in circulation was 50.2 percent at end-March 2017.
Post demonetization, 7.6 lakh or 762,072 pieces of counterfeit or fake notes were detected in the banking system, which was a rise of 20.4 percent from the previous year, the central bank data showed.
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As per RBI’s annual report, 95.7 percent of the counterfeit notes were detected by commercial banks in 2016-17. Barring Rs 100, the detection of counterfeit notes increased across denominations – notably, Rs 500 and Rs 1,000 - during 2016-17.
These old Rs 500 and Rs 1000 notes were invalidated by the government on November 8, 2016 which led to the withdrawal of 86 percent of the currency notes circulating in the system.
The central bank calls this a “nation-wide exercise to estimate the density of fake Indian currency notes (FICNs) detected during the counting and verification of notes”.
Using a two-step cluster sampling technique to estimate fake Indian currency notes (FICN) at currency chests and RBI, the central bank concluded the data “implies a significant pick-up in the rate of FICN (fake Indian currency note) detection at the Reserve Bank level in the post-demonetisation period as compared to a year ago”.The RBI’s annual report also states there has been a “quantum jump” in the number of suspicious transaction reports filed with the government’s Financial Intelligence Unit.