Days after its report on demonetisation, the Reserve Bank of India told a parliamentary panel that it has “no information” on how much black money has been extinguished or about unaccounted cash legitimised through exchange of old currency after the note ban exercise was conducted.
The central bank, which is under fire from the opposition for note ban and delay in disclosing figures, stated that it has “no information” whether demonetisation is being planned to be implemented at regular intervals. Last week in its annual report, the RBI finally made public the details of the junked notes that have come back into the system putting the figure at Rs 15,280 crore. The same figure has now been shared, “subject to future corrections based on verification process” with the Parliamentary Standing Committee on Finance.
Replying to the queries from the panel, RBI said that the verification for authenticity and numerical accuracy are still on, while some of the specified bank notes (old Rs 500/1,000 notes) which were accepted by banks and post offices are still lying in currency chests. It also said that the completion of the verification process is “going on in full swing” with most RBI offices working in double shifts and with the help of high-end verification machines, but will take time because of the large volume of notes involved.
“Till such time, these notes are processed by the RBI, their numerical accuracy and authenticity, only in estimation of SBNs received back is possible. Subject to future correction, based on verification process when completed, the estimated value of SBNs received as on June 30 is Rs 15.28 trillion,” the RBI said in its written reply.
The central bank did not give any direct reply on adverse impact of invalidating higher denomination currency on the informal and unorganised sector, as also about the GDP loss. The RBI said the deceleration in overall economic growth figures for 2016-17 had begun “much before demonetisation” due to weakness in industrial and services sector.
Last week, several members of the panel had sought redrafting of its draft report on demonetisation as the RBI at that time had not provided some crucial details including on the quantum of junked Rs 500/1,000 notes. The acceptance of the report was deferred as member MPs across party lines including BJD MP Bhartruhari Mahtab, SP MP Naresh Agrawal and BJP MP Nishikant had said that the panel’s report on demonetisation needed to be “redrafted” while some of them stated that it “lacks punch”.
In an unprecedented move, the government on November 8 last year, banned old Rs 500 and Rs 1,000 notes in an attempt to weed out black money in the country. The old notes were allowed to be deposited in banks, with unusual deposits coming under income tax scrutiny. In its annual report for 2016-17, the RBI had disclosed that all but about 1 per cent of the scrapped currency notes have come back into the system.