Bombay HC seeks Fin Min Arun Jaitley’s response on excess currency after demonetisation

The repercussions of demonetisation aren’t going to go away in a blink. The Bombay High Court has sent notices to the Finance Minister Arun Jaitley and head of the Central Economic Intelligence Bureau to respond to the allegations that an excess of ₹1.16 lakh crore came back to the central bank after demonetisation.

Both Jaitley and Archana Ranjan, who heads CEIB, have time until April 12 to respond to the directive which was issued by a division bench comprising judges BP Dharmadhikari and Revati Mohite Dere. It came up as a result of a criminal petition filed by RTI activist Manoranjan Roy, who has said that after the Prime Minister Narendra Modi announced demonetisation, excess money reached RBI. In his petition, Roy has sought a court-monitored probe into the irregularity as he wanted to know if they excess notes were counterfeit notes.

National Herald had first broken the story on February 4 that according to the RBI’s own annual reports, it printed only ₹14.11 lakh crore demonetised notes of ₹1,000 and ₹500 currency notes, but got ₹15.28 lakh crore back through the banking system. It indicates an excess of ₹1.16 lakh crore (₹11,66,50,00,00,000) coming back to banks.

After studying the RBI annual reports from 2000 to 2018, Roy says that in the RBI’s Annual Report, 2016-2017, till March—after demonetisation, there were 6,26,00,00,000 (6,260 million) pieces, valued at ₹62,60,00,00,00,000 (₹6.26 lakh crore) of the cancelled ₹1,000 notes in circulation. Also, during the same period, there were 15,70,70,00,000 (15,707 mn) pieces of cancelled ₹ 500 notes, valued at ₹78,53,50,00,00,000 (₹7.85 lakh crore) in circulation (Currency Management section, Table No. VIII. 1).

When tallying the above two figures of the demonetised ₹1,000 and ₹500 notes, it totals to ₹1,41,13,50,00,00,000 (₹14.11 lakh crore) This is what ought to have returned to the banks.

This is much less that the officially declared amount of Rs 15.28 lakh crore that was ploughed back to the banks. This indicates an excess of ₹1.16 lakh crore (₹11,66,50,00,00,000) coming back to banks.

Additionally, citing another set of data received under RTI replies, Roy states that from 2000 to 2018, RBI has printed 10,400 million pieces of ₹ 1,000, but in these 18 years, 11,222 million soiled pieces of ₹1,000 were disposed. “There is a huge discrepancy in the notes printed and the notes destroyed. I suspect there could be “a huge scam” of currency notes,” emphasises Roy.

Roy has also stated in his petition that 37,523 million pieces of Rs 500 notes were printed by RBI from 2000 to 2016, but they destroyed 39,875 pieces. “What are these extra notes,” forms the basis of Roy’s petition.

Additionally, citing another set of data received under RTI replies, Roy states that from 2000 to 2018, RBI has printed 10,400 million pieces of ₹ 1,000, but in these 18 years, 11,222 million soiled pieces of ₹1,000 were disposed. “There is a huge discrepancy in the notes printed and the notes destroyed. I suspect there could be “a huge scam” of currency notes,” emphasises Roy.

Roy has also stated in his petition that 37,523 million pieces of Rs 500 notes were printed by RBI from 2000 to 2016, but they destroyed 39,875 pieces. “What are these extra notes,” forms the basis of Roy’s petition.