Demonetisation: RBI may reveal in 2 weeks the amount it got through banned note deposits

The Reserve Bank of India (RBI) is likely to reveal the amount of money it received in demonetised Rs 500 and Rs 1,000 notes in two weeks, according to a report in The Economic Times, citing a source.

Though eight months have passed after demonetisation, the central bank has not yet revealed the number of banned notes it received through bank deposits despite many Right to Information (RTI) queries.

According to an ET report, the banking regulator will be forced reveal the amount as part of the calculation of its balance sheet for the year ended 30 June, 2017. The RBI will be holding a meeting with its auditors later this month to discuss and decide the figure, the report said.

The central bank usually declares its dividend to the government in August. In order to arrive at the amount to be paid to the government, the RBI has to add up the lower denomination notes that were not demonetised with the new notes and net it with the notes returned, the report said.

On 11 February, RBI Governor Urjit Patel had said that the central bank is still counting the notes that it received, hinting that it could be a long wait for people to know the amount of old currency notes that were deposited post-demonetisation.

“The number that we should now divulge should be a verified one and congruent with the complex accounting. There are tens of thousands of bank branches and 4,000 currency chests,” Patel had said after the RBI board’s meeting with Finance Minister Arun Jaitley.

“Given that the window is open till March 31 and June 30 at lower level, we need to be careful and try that this is a number which is not a mere estimate but a verified number — both physically and in the accounting sense,” Patel had said.

Resident Indian citizens, who were abroad during 9 November to 30 December 2016, were allowed to exchange the demonetised notes up to 31 March, 2017, and non-resident Indians up to 30 June, 2017.

The last time the RBI gave an update on the notes was as of 10 December 2016, when it said as much as Rs 12.44 lakh crore were deposited.

There were 17,165 million pieces of Rs 500 notes and 6,858 million pieces of Rs 1,000 notes in circulation on 8 November, 2016, the day Prime Minister Narendra Modi made the announcement of demonetising the two high denomination notes.

The total amount of high denomination currency circulating in the system on that day was, thus, Rs 15.44 lakh crore (Rs 8.58 lakh crore in Rs 500 notes and Rs 6.86 lakh crore in Rs 1,000).

In April, Parliament’s Public Accounts Committee (PAC) headed by Congress leader KV Thomas had questioned the RBI governor and deputy over demonetisation.

According to a PTI report, the RBI told the PAC it does not know the “exact number” of junked currency notes that were in circulation and it is still “reconciling” the number of notes that were deposited back. It is to be remembered that an additional 72 days have passed after prime minister Narendra Modi announced demonetisation of Rs 500 and Rs 1,000 notes.

“The exact number of Specified Bank Notes (SBNs) withdrawn from circulation is being worked out,” the central bank said in a written submission to the PAC.

RBI Governor Urjit Patel along with Deputy Governor R Gandhi and other senior functionaries appeared before the PAC, headed by former union minister and senior Congress leader K V Thomas, for oral evidence on ‘Review of Monetary Policy’.