Demonetisation: Only Rs 75,000 Crore Currency Unreturned Two Months Later

Representative image (Photo Credit: PTI)

New Delhi: As of January 8, only around Rs 75,000 crore of the total currency demonetised remains unreturned into the banking system, the Indian Express reported on Monday citing a “top official”.

Around Rs 14.50 lakh crore in old bank notes, or 93.5 per cent of demonetised currency, is back with banks and the RBI has started the process of counting these to identify counterfeit currency.

The total amount of currency in 500 and 1000 rupee denominations was around Rs 15.5 lakh crore and the government’s expectation was that around 20%, or Rs 3 lakh crore, would not come back.

Any currency that is not returned to banks is considered “extinguished”, and since bank notes are liabilities for the RBI, the total amount of extinguished currency corresponds to the amount of liabilities wiped out. The government was banking on special dividends, corresponding to the amount of extinguished liabilities, from the RBI as a windfall profit, available for spending.

In a separate report on Monday, Economic Times reported that three crore new bank accounts were opened in the 40 days after demonetisation was announced, citing data from Financial Intelligence Unit. Between November 15 and December 25, Rs 50,000 crore was deposited in these accounts in cash and Rs 3 lakh crore in the form of cheques and drafts.