99% Of Banned 1000, 500 Rupee Notes Returned, Says RBI

The Reserve Bank of India (RBI) in its annual report released today revealed that about 99 per cent of the banned 500- and 1,000-rupee currency notes returned. According to RBI estimates, a total of Rs 15.28 lakh crore in banned 500- and 1,000-rupee currency notes were returned by June 30, 2017, out of the estimated Rs 15.44 lakh crore in 500- and 1,000-rupee notes in circulation before the notes ban. The 1 per cent that has not returned to the RBI adds up to around Rs 16,000 crore.

Prime Minister Narendra Modi last year in a surprise move banned Rs 500 and Rs 1,000 notes to counter black money, with the high denomination notes losing their legal tender status from midnight of November 8. After the shock note ban decision, the government gave a 50-day window to deposit old notes by December 30, 2016. However, for some other categories of people, like NRIs, the deadline expired on June 30, 2017. The RBI follows a July-June financial year.

The RBI said that 8.9 crore pieces of 1,000- rupee notes - 1.4 per cent of total 632.6 crore pieces of 1,000-rupee notes in circulation in March 2016 - did not return as of March 2017. This implies 500-rupee notes worth approximately Rs 7,100 crore have not come back to RBI.

"A significant portion of SBNs (Specified Bank Notes) deposited could possibly be representing unexplained/black money," the finance ministry said in a statement. Finance Minister Arun Jaitley said the objective of demonetisation was to shift India from a predominantly high cash economy.

Here are some other highlights from the RBI's annual report:

1) The total expenditure of the Reserve Bank more than doubled to Rs 31,155 crore in 2016-17 from Rs 14,990 crore in 2015-16, primarily due to increase in expenditure on printing of new notes as a part of remonetisation of currency and provisions.

2) The total expenditure incurred on printing notes stood at Rs 7,965 crore for the current year (July 2016 - June 2017) as against Rs 3,420 crore during 2015-16. The upsurge in expenditure during the year was on account of change in the production plan of printing presses due to the introduction of new design notes in higher denominations as well as the requirement of larger volume of notes for replacement of the demonetised currency.

3) The number of suspicious financial transactions flagged by banks and other financial institutions went up sharply in 2016-17. The RBI report said banks reported a near six-fold jump in suspicious transactions from 61,361 in 2015-16 to 3,61,214 in 2016-17.