New Delhi > Indians have deposited almost all the Rs 500 and 1000 notes invalidated after the Narendra Modi government's demonetisation move in November 2016, the Reserve Bank of India (RBI) said in its annual report for 2017-18 after a count that lasted nearly two years. Banks have received Rs 15.3 trillion ($217 billion), or 99.3% of the currency invalidated, RBI said in the annual report released today. An amount of Rs 107 billion has not yet been received by the RBI after the cash ban, the report said.
The government had initially estimated about Rs 5 trillion of the Rs 15.4 trillion demonetised on 9 November 2016 would not return to the system, indicating that this was cash stashed away illegally to avoid tax. Demonetisation had prompted the central bank to print new currency notes, reducing its profit and cutting annual dividend payout to the government by half last year. This year, it transferred Rs 500 billion to the government as dividend, compared with Rs 306.6 billion a year ago.
RBI's accounting year runs from July to June. Prime Minister Narendra Modi's decision to ban high-value currency notes of Rs 500 and Rs 1000, along with the introduction of the goods and services tax (GST) last year, acted as a drag on the Indian economy. Growth has since rebounded, and, in the quarter ended March 2018, the economy expanded 7.7% from a year earlier.
Following the demonetisation of Rs 1,000 and Rs 500 notes last November, the central bank had introduced Rs 2000 notes and new Rs 500 notes. The RBI also launched new Rs 200 denomination notes while a new Rs 100 note in lavender colour is also in the works.
