Demonetised currency: Has the RBI got its numbers wrong?

How many demonetised currency notes were in circulation on Nov 8? RBI had said ₹14 lakh crore in March 2016, ₹15.44 lakh crore on Nov 8, and now claims 20 lakh crore was in circulation on Nov 8



Photo by Ramesh Pathania/Mint via Getty Images
Photo by Ramesh Pathania/Mint via Getty Images
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NH Political Bureau

There is something seriously wrong, it would seem, in the Reserve Bank of India. Just how many demonetised currency notes were in circulation on November 8? RBI has added to the confusion by putting out the figures of ₹14 lakh crore in March, 2016 and ₹15.44 lakh crore on November 8. But now the RBI has informed an RTI activist in Mumbai, Anil Galgali, that on November 8 this year the central banker had as much as ₹20 lakh crore in demonetised currency in circulation. What is the figure after all?


The brief report filed by the news agency Press Trust of India and published in The Business Standard quotes the RBI informing the activist, “On the day Prime Minister Narendra Modi announced scrapping of Rs 1,000 and Rs 500 notes, the Reserve Bank of India (RBI) had only Rs 4.94 lakh crore in 2,000-rupee notes, which was approximately one-fourth of over Rs 20 lakh crore it had in demonetised currency notes.” The full report can be read here.


But the RBI had earlier given out quite different figures. This report for example quotes the RBI’s annual report as saying that it had ₹14 lakh crore in demonetised notes in March, 2016. It read, “Estimates of the two denominations in circulation are available from the RBI's annual report for 2015-16. While Rs 500 notes worth Rs 7,85,400 crore were in circulation, the corresponding figure for Rs 1,000 notes was Rs 6,32,600 crore, adding up to Rs 14,18,000 crore (Rs 14 lakh crore). The two denominations accounted for about 86.4 percent of the total value of currencies in circulation, according to the RBI report.

RBI has added to the confusion by putting out the figures of ₹14 lakh crore in March, 2016 and ₹15.44 lakh crore on November 8. But now the RBI has informed an RTI activist in Mumbai, Anil Galgali, that on November 8 this year the central banker had as much as ₹20 lakh crore in demonetised currency in circulation. What is the figure after all?

In Parliament, Minister of State for Finance Arjun Ram Meghwal informed members that on November 8 , 2016 ₹15.44 lakh crore value of demonetised currency notes were in circulation, which marks an increase from March.


While The Indian Express reported that the stated purpose of demonetisation was not working out in view of the deposits of demonetised currency coming back to the banking system, Swarajya, a right-wing magazine sympathetic to the Government, questioned the Indian Express report and said this quoting from RBI stats: “ From the table, it can be seen that the total currency in circulation as on 18 November was Rs 14.27 lakh crore - a decline of Rs 3.70 lakh crore (20.61 per cent) over the figures from 4 November.”


If this figure is correct , which tallies with the RBI’s figure for March, 2016, from where has the figure of ₹20 lakh crore come?

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