MUMBAI, Aug 29 — Indians have deposited almost all the currency notes made illegal by Prime Minister Narendra Modi in 2016, the central bank said in a report after a count that lasted nearly two years.
Banks have received 15.3 trillion rupees (RM895 billion), or 99.3 per cent of the currency invalidated, the Reserve Bank of India said in its annual report on Wednesday. An amount of 107 billion rupees has not yet been received by the RBI after the cash ban, the report said.
The government had initially estimated about five trillion rupees of the 15.4 trillion rupees rendered worthless on Nov 9, 2016 wouldn’t return to the system, indicating that this was cash stashed away illegally to avoid tax.
The cash ban had prompted the central bank to print new currency, reducing its profit and cutting annual dividend payout to the government by half last year. This year, it transferred 500 billion rupees to the government as dividend, compared with 306.6 billion rupees a year ago. RBI’s accounting year runs from July to June.
Modi’s decision to ban high-value currency notes, along with a chaotic introduction of the goods and services tax last year, acted as a drag on economic expansion. Growth has since rebounded and in the quarter ended March 2018, the economy expanded 7.7 per cent from a year earlier. — Bloomberg
