Note Ban: RBI yet to replace over 70% of invalidated currency

In a press conference, held post the bi-monthly Monetary Policy Review, Deputy Governor, R Gandhi stated that customers have deposited Rs.11.5 lakh crores in banks, since the note ban. Government of India (GOI) in consultation with RBI had invalidated currency worth Rs 14.9 lakh crore on November 8, 2016.

Gandhi also said that during the period between, 10 November and 5 December 2016, the RBI has supplied banknotes of various denominations worth Rs 3.81 lakh crore to the public. The pieces of lower denomination notes supplied by the RBI stood at 1,910 crore.

However, it may be noted that the amount replaced so far is just 33 per cent of what customers have deposited with the banks. The notes which were made illegal tender last month were nearly 84 cent of total currency in circulation. According to estimates, the currency brought back only represents 26 per cent of the total invalidated currency.

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The country is undergoing a huge cash crunch due to the government's decision to withdraw currency notes of largest denomination from the economy and RBI has faced criticism for its unpreparedness.  Economists are divided about the move and some have said that it would take 3-6 months for the situation to return to normal.

Deputy Governor, though, clarified  that demonetization decision was not taken in haste and that it is expected to deal with the problem of high quality counterfeit notes and also to unearth black money that may be held in cash.

According to data available on National Crime Records Bureau, counterfeit fake currency notes amounted to Rs 28 crore were recovered and seized for the period between Jan 1, 2016 to Sept 30, 2016 from all states taken together. Total amount of fake notes recovered and seized during the period between 2011 and 2016(till 30 September) stood at Rs 155 crores.

Lower Denomination Notes Supply