99.3% of demonetised currency returned to banks: RBI

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The Congress on Wednesday demanded an apology from Prime Minister Narendra Modi, alleging he lied to the country over the demonetisation issue, after the RBI said nearly all the 500 and 1,000 currency notes scrapped in November 2016 returned to the banking system.

People wait for a bank to open to withdraw and deposit their money, after the scrapping of high denomination 500 and 1,000 Indian rupees currency notes, in Ahmedabad, India, December 5, 2016.

The thinking behind the hugely controversial policy was to counter the culture of hoarding cash - especially in the locked, steel almaris (wardrobes) that are ubiquitous in Indian households - by forcing people to either spend it or put it into banks, where it could be taxed. Thousands of SME (small and medium enterprises) units were shut down. "I suspect that the bulk of the currency (Rs 10,720 crore) was in Nepal and Bhutan and some of that was lost or destroyed". The indent for Rs 2,000 notes also fell 15.1 crore pieces in 2017-18 from 350.4 crore a year earlier.

"The RBI annual report proves that all his objectives failed", said Gandhi, adding he believed the demonetisation was meant to benefit a handful of Modi's "capitalist friends".

"So, government and RBI actually demonetised only Rs 13,000 crore and the country paid a huge price".

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He said for the Rs 13,000 crore, which did not come back to the banks, the country lost Rs 2.25 lakh crore worth of GDP, crores of jobs and over a hundred lives.

"The PM had promised that black money, terror funding, and fake currency will be eradicated", Congress chief Rahul Gandhi, the fourth-generation politician from the fabled Nehru-Gandhi dynasty, told a news conference. In the immediate aftermath of the demonetisation measure effected in November, 2016 the government had claimed that a sum of Rs. three lakh crore to Rs. four lakh crore would not come back to the banks, implying that it would correspond to the unaccounted money in the system.

Tewari claimed as a outcome of the demonetisation exercise, the dividend paid by the RBI to the government of India was halved from Rs 65,876 crore in 2015-16 to Rs 30,659 crore in 2016-17. However, the supply of banknotes was lower than the previous year. "The currency in the system now is 87-88 per cent, that is about Rs 3-4 lakh crore less currency than it would have been if the system would have continued in the old manner", he said. RBI data showed that the value of banknotes in circulation increased by 37.7% over the year to Rs. 18.04 lakh crore at end-March 2018.

You are more likely to come across a fake Rs 100 note than fake currency in any other denomination.