The old notes of 500-rupee and 1,000-rupee denomination ceased to be legal tender from December 31, 2016.
"I suspect that the bulk of the Rs 13,000 crore is in Nepal and Bhutan and some that was lost or destroyed". The statistics suggest that the demonetisation exercise failed to check black money, which was claimed to be one of the main aims of banning specified notes.
"... India's currency to GDP ratio moved up to 10.9 per cent in 2017- 18, returning to being amongst the highest levels of currency usage in peer emerging market economies (EMEs) and advanced economies (AEs) as well". It is important to note here that the new Rs 2000-notes were only introduced into the system couple of days after demonetisation kicked in on November 8, 2016. Over 100 lives were lost.
"This big task of processing and verification of SBNs (specified bank notes) was successfully achieved with the coordinated efforts put in by the work force of the Issue Department of the Reserve Bank", said the report.
In 2017-18 (July 2017 to June 2018), it spent another Rs 4,912 crore on printing of currency, the annual report said.
"This entire elaborate theory which was built that demonetisation is going to result in a cash-less economy, has been blown out of the water by the RBI figure", he said.
The Reserve Bank of India finally revealed the quantum of notes that have returned into the system post the Demonetization. For instance, the SBI's economic research department, headed by chief economist Soumya Kanti Ghosh, predicted that up to Rs 2.5 lakh crore wouldn't come back into the banking system.
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The RBI said that the total value of the demonetised currency returned to the banks now stands at Rs 15.3 lakh crore.
Sen also mentioned the use of black money, he said that trade and money lending are the commonest ones.
While the actual estimate of fake Indian notes in circulation (FICN) has been hotly debated, the central bank's annual report implies that demonetisation may not have done much to curb the generation of new fake currency.
Chidambaram said every rupee of the Rs 15.42 lakh crore, barring a small sum of Rs 13,000 crore, has come back to the RBI.
The government replaced old Rs 500 notes with new ones, but no replacement for Rs 1,000 notes have been made.
"There are some small notes which are stuck in the whole process, which can come back".
"...the supply of banknotes was lower [in 2017-2018] than that in the previous year, but was noticeably higher compared to the pre-demonetisation year", the annual report notes.