Still counting demonetised notes: RBI chief to House panel

The RBI informed the Standing Committee on Finance, headed by senior Congress leader M Veerappa Moily, that it had issued tenders for fresh Currency Verification Processing System (CVPS) machines to speed up the counting.

Written by Anand Mishra | New Delhi | Published:July 13, 2017 5:05 am
RBI, reserve bank of india, urjit patel, demonetisation, demonetised currency, old currency, note ban, rs 500 ban, rs 1000 ban, indian express news, india news, business news ‘More counting machines sought’, says Urjit Patel.

RESERVE BANK of India (RBI) Governor Urjit Patel told a parliamentary panel on Wednesday that the demonetised Rs 500 and Rs 1,000 notes which were deposited in banks after November 8 are still being counted. Therefore, the RBI could not provide the “exact amount” of the scrapped notes received.

The RBI informed the Standing Committee on Finance, headed by senior Congress leader M Veerappa Moily, that it had issued tenders for fresh Currency Verification Processing System (CVPS) machines to speed up the counting.

Many panel members, especially those from the Opposition, are learnt to have expressed their dissatisfaction at his response.

“Will you be able to complete the counting by May 2019 (when the Narendra Modi government completes its five-year term),” asked Congress member Digvijaya Singh.

Another Opposition member, Naresh Agarwal of the Samajwadi Party, even walked out of the meeting, asking what was the point of calling the RBI Governor if the answers were not forthcoming.

This was Patel’s second appearance before the panel. After first appearing before the panel on January 18, he sought exemptions twice. He was accompanied by RBI Deputy Governors S S Mundra, N S Vishwanathan and B P Kanungo.

“We were told that there were 57 in-house CVPS machines, and seven additional machines have been brought in for counting. Now, they have issued tenders for new machines to expedite the process,” said a member, quoting Kanungo.

In a written submission, the RBI told the panel that “notes received during demoentisation are required to be reconciled with the reported figures to ensure accounting integrity, and processed for verifying numerical accuracy and authenticity through CVPS machines. This work has been accorded top priority. Since the CVPS machine capacity is limited, steps have been taken to expedite the process so as to arrive at the exact amount of Specified Bank Notes (SBNs) received.”

It said that all regional offices of the RBI have been operating the CVPS machines in two shifts, for six days of the week.

“We have also added machine capability by making use of large machines available with commercial banks for processing these notes, under our supervision. A tender has been floated to acquire additional machines from vendors on lease. Process for regular purchase of machines is being expedited,” said the RBI.

Holding up an old Rs 500 note, a ruling party member then asked RBI officials whether an expiry date should also be printed along with the year of issuance.

Panel members said the RBI officials did not answer most of their questions, including on the exact amount of demonetised currency that has returned to the central bank so far. The RBI officials are learnt to have offered to provide written replies to all the questions.

The panel, which is likely to submit its report during the Monsoon Session beginning next week, decided not to call Patel again.

During the meeting, members raised questions over the demonetisation drive, RBI’s preparedness for digital transaction, and prevalence of bitcoins. Digvijaya said none of the objectives of the demonetisation decision, including checking fake currency and controlling terror, had been achieved.

Criticising the government’s digital money pitch, an Opposition member referred to a photograph of Minister of State for Finance Arjun Ram Meghwal climbing a tree to make a phone call during a visit to his constituency sometime back. If a minister has to climb a tree to make a call due to poor connectivity, how will villagers in remote areas be able to carry out digital transactions, he asked.

It was earlier decided that three panel members would ask three questions each, after which the RBI Governor would give his replies. The other members would then resume questioning. But BJP member Nishikant Dubey, backed by his party members, blocked the move, saying Patel would only answer after all the questions were over.

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  1. R
    Router
    Jul 15, 2017 at 1:51 am
    But what about these notes : m.ndtv /kerala-news/from-hard-cash-to-hardboard-how-old-rs-500-1-000-notes-are-being-recycled-1632919 80 metric tonnes of notes were recycled to make hardboards!!! Hiw will you count these Mr patel? .... Talk some bloody sense!!!!
    Reply
    1. D
      Diplomat
      Jul 13, 2017 at 5:54 pm
      Two theories: (1) The count has exceeded the number of notes supposed to be in circulation. If this has happened then it would mean all the bank note data published by RBI for all these years gets wrong. (No. I am not including fake notes in this since RBI and bank chests have equipment to sort real and fake notes). (2). The data - as many would have expected by now - is not good and most of the notes are with RBI with no dividend possible. In such case, is RBI avoiding to declare the data so as to avoid publishing it in its annual report this year? Any other guesses?
      Reply
      1. D
        Diplomat
        Jul 13, 2017 at 5:49 pm
        Why political parties think differently when house panel questions someone? Why BJP members (also) cannot ask pertinent questions? Are they there as member of their party and hence have likes / dislikes to match action of their party's government? Aren't they supposed to be member of parliament first (i.e. representative of their cons uency) and party members later? (off course, same question needs to be asked to members of all parties). Or, am I too idealistic?
        Reply
        1. B
          Bharat Kumar
          Jul 13, 2017 at 4:39 pm
          Most likely, the note counting will never match the amount claimed to have been deposited in the bank. That is because the notes submitted in huge numbers in lakhs and crores at each bank. There was an ample opportunity for a bank clerk or manager to write 200 where 100 was received. Normally, this is reconciled every day, but those were unusual days where most bank staff were deployed to accept currency and could have skipped a few checks. That is all that is needed for a corrupt bank employee to collude with a depositor. You don't hear the people crying that they have lost money, because they could have got double the money they deposited into accounts and can now pay even 80 penalty! They fooled the system. Even some people in the Government said they had to tweak the processes to check Indian Jugaad! Lastly, the political parties had an opportunity to accept donations and have them deposited, but they couldn't use the money because withdrawals were limited! Rest is history
          Reply
          1. M
            mr doctor
            Jul 13, 2017 at 4:36 pm
            to mr tomar we are more than stupid
            Reply
            1. D
              dk
              Jul 13, 2017 at 4:18 pm
              Keep on counting upto 7 rebirths.
              Reply
              1. C
                chakm
                Jul 13, 2017 at 3:53 pm
                Urjit Patel should know better that paper money has no value in the face of economics, and to waste valuable time of officials counting them is nothing but exhibition of cheap optics. Does he or his clutch of officials have the capacity to count the crores that have been burnt, destroyed and thrown in water? What act is he trying to pull, other than to keep his position. This whole fiasco with demonitisation has been a total one-sided, anti-democratic act of dictatorial aggression on the hapless majority of the country and sadly, people who are so blinded by the sheer celebrity status of the PM, can't seem to fathom the extent of this presumable example lawlessness.
                Reply
                1. A
                  atul
                  Jul 13, 2017 at 3:22 pm
                  अगर 6 महीने बाद भी हिसाब नहीं दे सकते और न ही बता सकते है की कब हिसाब देंगे तो किस बात की सैलरी ले रहे हो Taxpayers से ?
                  Reply
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