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Tuesday, July 17, 2018

Demonetisation: Enough currency with RBI to last beyond December 30, says Arun Jaitley

Jaitley also defended government and RBI’s decision barring people from depositing over Rs 5,000 more than once.

By: ENS Economic Bureau | New Delhi | Updated: December 21, 2016 2:41:10 pm
Arun Jaitley, Latest news, India news, India-UK Tech Summit, Infrastructure deficit Latest news, India news, Latest news, India news New Delhi: Union Finance Minister Arun Jaitley. (PTI Photo)

The Reserve Bank of India has sufficient currency to be supplied even after December 30 and the central bank was adequately prepared for the currency withdrawal decision, finance minister Arun Jaitley said on Tuesday. “The Reserve Bank was fully prepared to deal with currency shortages post demonetisation and has enough currency in its chests to last far beyond December 30,” Jaitley said.

The RBI has already supplied over Rs 5 lakh crore worth of currency to the markets, Department of Economic Affairs Secretary Shaktikanta Das had said last Thursday. The finance ministry plans to inject at least 50 per cent worth of new currency to replace the amount of old notes of Rs 500 and Rs 1000 that will be deposited in the banking system by December 30, Das had said.

WATCH VIDEO | RBI Buckles Under Pressure, Withdraws Rs 5,000 Deposit Limit

Jaitley also defended government and RBI’s decision barring people from depositing over Rs 5,000 more than once. “If you have old currency, deposit it with banks at one go as repeat deposits of such notes raises doubts” he said, adding that with all exemptions for use of old notes are now over, there is no scope to do anything with them but to deposit them in bank accounts.

The finance ministry and the RBI on Monday said deposits of above Rs 5,000 in scrapped currency notes can be made only once till December 30. Any such deposits can be made only after an account holder satisfies the bank why it could not be done earlier, RBI said on Monday.

These restrictions have been put in place despite assurance by the government earlier that people can deposit old notes into their banks accounts anytime till December 30, without any limit. Since the announcement on currency withdrawal on November 8, the government has repeatedly advised people not to panic, spread out their transactions and freely deposit cash up to Rs 2.5 lakhs without inviting tax scrutiny.

Amid speculation that the government announced these curbs as more than expected amount of old notes have been deposited into bank accounts so far, Jaitley said exact data on deposits of scrapped currency notes will be made public only after accurate calculation after December 30, the last date for depositing old currency notes in banks.

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“The currency which got printed might have gone to Post Offices and from there to banks and again back to currency chest so there could be double counting and scope for inaccuracies. So we do not want to guess the figures (of currency in circulation),” Jaitley said. As per RBI data, over Rs 12.44 lakh crore worth demonetised notes have been deposited till December 10.

When asked on bankers being caught in converting black money into white, Jaitley said that the Axis Bank has assured the government that it is taking action against erring officials who are involved in irregularities post demonetisation. Many of the Axis Bank officials are being suspended and held for questioning by the investigating agencies.

“The chairperson (Shikha Sharma) of the bank has given details. The bank has identified the officers who the investigative agencies could not catch and they have sacked the suspected officials. It has taken action against its officials,” Jaitley said after a pre-budget meeting with bankers, which was also attended by Axis Bank MD and CEO Shikha Sharma.

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