Note-ban 3rd anniversary:Cash demand soars 20.14% to Rs21.6tln
Mumbai, Nov 8 (PTI) The currency in circulation has
jumped a whopping 20.14 percent to scale Rs 21.59 lakh crore,
show the latest Reserve Bank data released on Friday, which is
the third anniversary of the controversial note-ban.
Reducing the cash dependency in the economy by making
people use alternatives like digital payments was one of the
stated motives of the decision to cancel as much as 87.6
percent of the currency in circulation on November 8, 2016.
The badly implemented decision led to many people
losing their lives while standing in serpentine queues to
withdraw money or deposit the banned currency bills, and
crippled the economy.
On November 8, 2016, the government and RBI pulled out
Rs 500 and Rs 1,000 denomination notes from the system in a
surprise move. Unsuspecting people deposited virtually the
entire stock of the banned notes with banks, putting a big
question marks over the efficacy of the exercise.
The RBI data on Friday showed the currency with the
public grew 15.2 percent to Rs 21.59 lakh crore as of the
fortnight to October 25, as against Rs 17.97 lakh crore on
November 4, 2016.
However, the growth of currency in circulation seems
to be slowing down as it had grown 21.1 percent in the last
year over the previous year.
According to the RBI data, there has been a 5.2
percent addition to the cash economy with the public between
April 1 and October 25, 2019, which is slower compared to 6.6
percent growth a year ago.
Apart from prodding the people to move to digital
which would have helped arrest the growth of black money, the
original move was also aimed at curbing fake currency apart
from restricting insurgency activities.
After falling massively post-demonetisation by nearly
Rs 10 lakh crore, the currency in circulation has recouped at
a faster pace, and it took over 16 months for the levels to go
back to the pre-demonetisation levels.
Digital payments have grown manifold over time and the
UPI volumes hit 1 billion transactions-mark in a single month
of October. PTI AA