Counting of old notes still on and no one knows for how long

The latest embarrassment for the RBI was it being ridiculed by the Parliamentary Standing Committee of Finance for its failure to produce a figure for the amount of money that has come into the...

Last week, Reserve Bank of India (RBI) Governor Urjit Patel appeared before a Parliamentary panel for the second time and is understood to have said, the deposited banned notes are still being counted and therefore he was not in a position to give a figure of the scrapped currency, back in the system.

If you remember, in January too, the RBI governor had told the Parliamentary panel that he would submit a statement on the amount of money that came back into the system after demonetisation.

Just after a month of the demonetization announcement, the RBI made an announcement saying banking system has received Rs 12.44 lakh crore in invalidated high-value notes until 10 December. It took 32 days for the RBI to compute the figure of Rs 12.44 lakh crore or about 81 per cent of the total amount of currency demonetised.

Since December 10, over 200 days have passed. And, the RBI is still unable to finish counting of the remaining Rs 3 lakh crore. In a meeting with a Parliamentary panel last week, RBI Governor Urjit Patel repeated what he has been saying for the last seven months. The RBI is still counting notes and has even ordered new machines to speed up the process.

'It is not a convincing explanation' - not just for the parliamentary panel but also to a billion people who were subjected to a highly disruptive economic experiment. The reports in Firstspot says, if one goes a step further, it is nothing but a 'cruel joke', considering the number of jobs lost and businesses hit due to the exercise.

The report gives two reasons for the delay by the RBI in giving exact number of demonetised currency notes.

Firstly, the amount of money returned to the banking system is more than what was demonetised. The RBI couldn't stop the fake currency from entering into the banking system through formal channels during the demonetisation period and it is still finding ways to make its accounts.

It may be recalled that though the deadline for public to deposit/exchange old notes ended on 30 December, the window for NRIs and certain categories and with Rs 6,000-Rs 8,000 crores of deposits in old currency would have come from cooperative banks, the RBI's work will be even more time-taking going by what the governor says.

The second possibility is that the central bank is painfully inefficient in getting the work done within deadlines. But RBI's past record would find it difficult to buy this excuse.

The report is surprised that RBI Governor Urjit Patel didn't even commit a timeframe to the panel to disclose the figure of old currency deposits. However, as the RBI's financial year nearing it has to show the numbers of demonetised in August ( The Central bank follows a financial year of July to June, not April to March).

So, the question is what will be the central bank's excuse if it is still counting the notes even then? Or will the figure remain a mystery even then?

OneIndia News