Banks Receive Rs 12.44 Lakh Crore Of Old, Invalid Notes So Far, Says RBI
Mumbai: Banks have taken back Rs 12.44 lakh crore ($184.24 billion) of high-value currency that the government abruptly abolished last month, Reserve Bank of India Deputy Governor R Gandhi said on Tuesday.

That represents about 80 percent of the Rs 15.44 lakh crore in 500- and 1,000-rupee notes that were circulating before Prime Minister Narendra Modi abolished them on Nov. 8, in a surprise move targeting counterfeiters and people holding undeclared wealth.

Analysts had estimated that only about 13 trillion of those abolished notes would be deposited at banks, because people with undeclared cash would be wary of attracting the scrutiny of tax authorities.

Indians have until Dec. 31 to turn in their old notes.

Economists said total deposits were likely to reach about Rs 13 lakh crore to Rs 13.5 lakh crore by the end of the year, in line with the estimates.

“The old notes of 500 and 1000 rupees which have been returned back to the Reserve Bank and the currency chest amounted to Rs 12.44 lakh crore as of Dec. 10, 2016,” Gandhi said in a short news briefing.

The RBI has printed some 1.7 billion new 500- and 2,000-rupee notes, which will replace the abolished notes, Gandhi said. That is a fraction of the 24 billion individual notes that were withdrawn.

PM Modi’s action has created a widespread cash shortage that has hit many aspects of the economy, from manufacturing to consumer demand.

But PM Modi says it was necessary to crack down on India’s shadow economy, although Indians have resorted to ingenious ways to try to deposit their undeclared assets, such as splitting up their money and paying others to temporarily park it in their bank accounts.

The government and the RBI have vowed strict action against those believed to be trying to deposit undeclared assets, including tougher scrutiny of all deposits of more than 250,000 rupees.

The RBI on Tuesday also asked banks to keep all CCTV footage from Nov. 8, in another bid to scrutinise depositors.

A source at the Central Bureau of Investigation told Reuters on Tuesday it had arrested an RBI officer in Bengaluru for “unauthorised changing” of Rs 600,000 in old 500- and 1,000-rupees notes.

RBI Deputy Governor S.S. Mundra, at the same news briefing, said a junior central bank official had been “suspended” because “he was recorded to be present in a bank branch where some suspected transaction was happening.”

“We have instituted investigation and due action would be taken once the details are ascertained,” Mundra said.

[“source-ndtv”]

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