Counting of Returned Demo Notes Still On: RBI Governor RBI floats tender to buy more counting machines; Patel says over 15 lakh cr currency back in circulation

Published on 14 Jul 2017 by Team

Counting “is still on” and the information will be provided “at the earliest,” Patel said. Deputy Governor BP Kanungo told the committee that RBI has floated a tender to buy more counting machines — in addition to the 59 it already has and the seven it hired — to speed up the counting, according to people familiar with the proceedings.

Patel cited the government’s recent decision to allow cooperative banks to return old currency and the likelihood of Nepal giving back demonetised currency as part of an agreement as additional reasons that are delaying the counting. Many members of the Parliamentary Standing Committee of Finance protested the unavailability of the amount of currency returned, poin- ting out that Patel had promised in January to provide the exact figure at his next appearance before the panel. Congress MP Digvijaya Singh asked the Governor whether he would give the figure “at least by May 2019,” when the government’s term ends, prompting almost all members, including former Prime Minister Manmohan Singh and the RBI top brass, to burst into laughter, the people said.

Responding to another set of questions, Patel said currency worth ? 15 lakh crore is back in circulation, which is about 86% of the total in circulation in November, when the government scrapped ? 500 and ? 1,000 notes.

However, members, including Bhartruhari Mehtab of BJD, Saugata Roy and Dinesh Trivedi of Trinamool Congress, TK Rangarajan of Communist Party of India (Marxist), pointed out that were reports of currency shortages in many parts of the country. Patel said actions are being taken to address the issue.

Mehtab argued that the lack of currency led to unrest among farmers, who were unable to buy fertilisers on time and get a decent price for their produce, the people said. Rangarajan said Patel should give the final figure of demonetised currency returned at least before “focus is fully shifted to implementation of GST.”

Digvijaya Singh is said to have poin- tedly asked Patel to spell out how the stated reasons for demonetisation could be justified, given the increasing incidents of terror strikes, unabated stone-pelting in Jammu & Kashmir and widely reported seizures of fake currency and unearthing of black money by agencies. Patel and his colleagues avoided direct responses and said they would provide the members with a reply in writing. BJP member Nishikant Dubey then intervened to protest subjecting the RBI chief to “too many questions” and said the members should wait for his promised response. One committee member took out a ? 500 note and told Patel that along with the date of printing, the note should have an “expiry date so that everybody is prepared.” Many members asked Patel what action RBI was contemplating against bitcoin, a crypto-currency and digital payment system, because the central bank had already said it was an “illegal mode of transaction.”

The deputy governor said RBI is preparing a bitcoin policy and added that one of the proposals is to treat it “as a commodity.”

Source: Economic Times

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