Reserve Bank of India’s Governor Urjit Patel could not give details on how much money was deposited in banks post demonetisation, and this did not go well with the nation.There could be several reasons behind Patel’s silence. One of the possible reasons is the double counting of money.
There is a possibility that RBI must have counted money twice. Also, there is an issue of segregating the banned Rs 500 and Rs 1,000 currency from deposits of notes which are legal tender.
Around 17.165 billion pieces of old Rs 500 notes and 6.858 billion pieces of old Rs 1,000 notes amounting to Rs 15.4 lakh crore were in circulation.
The RBI could also not come up with a figure as the time frame to deposit banned notes for NRIs has been extended till March end.
"What the RBI has done is, it has collected figures from not only the commercial banks but also post offices, district cooperative banks, petrol pumps and what has happened is there is a lot of overlap,” Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India, told ET.
For instance, the post offices bank with SBI but also report numbers directly with RBI. Since SBI's numbers include post office's money, RBI would have to exclude them to arrive at the correct figure.
"A petrol pump may have an account with SBI and when that money is deposited, it could be counted twice,” Ghosh told ET.
"On the basis of the number RBI has put out, 95% currency may be back into the system. Probably, RBI could give a timeline by when they expect to finish physical reconciliation of currency. But I would assume that at least one level of counting and checking has been done by the banking system. So, it is not as if all the money that has returned has to be counted again. It's only where there this is a need to reconcile, they should do it,” A Prasanna, Chief Economist at ICICI Securities PD, told ET.