It took almost two years for RBI to complete the tasks of processing and verifying banned currency notes, its annual report showed.
"SBNs (specified banknotes) were received by the Reserve Bank either directly or from bank branches/ post offices through the currency chest mechanism".
This means that just Rs 10,720 crore of the junked currency notes did not return to the banking system.
The demonetisation was hailed as a step that would curb black money, corruption and check counterfeit currency but RBI said, "Counterfeit notes detected in SBNs decreased by 59.7 and 59.6 per cent in the denominations of Rs 500 and Rs 1,000, respectively". The withdrawal of notes had sparked an acute shortage of cash in India and hit the economic growth. "This works out to around 88% of its underlying three-year-trend had there been no demonetisation", the central bank notes.
Senior Congress leader P Chidambaram slammed the government after the RBI report saying the Indian economy had suffered due to the note ban by way of job loss, closure of industries and the GDP growth. Instead, a new Rs 2,000 notes were introduced post note ban. "15 crore daily wage earners lost their livelihood for several weeks", he said. Thousands of SMEs were shut. "Lakhs of jobs were destroyed", he tweeted.
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The government replaced old Rs 500 notes with new ones, but no replacement for Rs 1,000 notes have been made.
The demonetisation of Rs 500 and Rs 1000 notes in November 2016 had prompted the RBI to print new currency notes.
The Reserve Bank of India's second annual report since demonetisation puts to rest any illusions about the Modi government's grandest financial gesture. "Today, RBI in its annual report has vindicated our apprehension", Banerjee wrote on her Facebook page. This data came to light primarily on the back of processing of notes withdrawn from circulation after demonetisation. "The entire trade sector functions on cash, a sizeable portion of which is black money".
Sen also mentioned the use of black money, he said that trade and money lending are the commonest ones.
In terms of 100 notes, 2,21,447 fake pieces were detected in 2015-16, which slumped to 1,77,195 in 2016-17 (the year of demonetisation) but then bumped back up to 2,39,182 in 2017-2018. However, this is more than double the amount of Rs. 3,421 crore that was spent in the previous year (July 2016 to June 2017).