99.3% Currency Back In Banks: Does That Include Fake Notes?

Annual report of Reserve Bank of India -RBI indicat­ing that rupees 15.31 lakh crores out of total 15.41 lakh crores worth demonetized currency on 08.11.2016 which comes out to be approximately 99.3 percent of demon­etized notes of rupees 500 and 1000 re­turned to banks creates doubt that ei­ther fake currency has been accounted for in system by RBI after checking, or some duplicate series of notes might have been issued in earlier regime.

Apprehensions in this respect were clear to RBI when it stopped giving daily figure of demonetized currency deposited in banks during period of demonetization. It was the reason that in last week of December 2016, RBI required depositors to pro­vide source of deposited demonetized currency, though later it was with­drawn. RBI did not keep to its prom­ise of accepting demonetized currency with its offices between 01.01.2017 and 31.03.2017. Still no decision is there to accept demonetized Indian currency held with banks in Nepal and Bhutan where system allows Indian currency in normal circulation. Now it is clear that decision is not being taken in this regard because in such a scenario, deposited total demonetized Indian currency may cross ultimate figure of 100-percent. RBI should also not ig­nore that a substantial percentage of circulated currency can never practi­cally come back to banks because of destroyed in fire or garment-wash, apart from kept hidden and forgotten by many who died without disclos­ing to their legal heirs, successors or nominees.

Unfortunately such a nice step of demonetizing currency could not get required success because of poor im­plementation. Voluntary-Disclosure-Scheme giving chance for 50-percent tax on accounted currency if would have been announced on 08.11.2016 it­self, would have filled exchequer with huge tax because those having ex­changed by paying heavy commission ranging upto 30-40 percent to private bodies, would have preferred giving 50-percent tax to exchequer. Currency-crunch during demonetization result­ing in long day-night queues on ATMs would not have been there if all cen­ters like petrol-pumps, milk-booths, Kendriya Bhandaar etc would have given a blanket permission to accept demonetized currency till 31.12.2016. Single Identity-Proof say Aadhar-Card together with provision of putting ink on finger like during voting could pre­vent multiple exchange by single indi­viduals.

Madhu Agrawal

New Delhi

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