Double counting of deposits ruled out

woman exchange Indian Rupee 2000/- with ink finger at a SBI Bank in Ahmedabad on Friday November 18, 2016.   | Photo Credit: Vijay Soneji

Bankers and former central bank officials assert there is virtually no scope for the figures on deposits of withdrawn high-value banknotes released by the Reserve Bank of India to be inaccurate on account of ‘double counting’.

“There is no question of double counting,” Usha Thorat, a former Deputy Governor of the RBI, told The Hindu. “RBI only looks at the currency chest data and the notes that were deposited at the RBI counters.”

Economic Affairs Secretary Shaktikanta Das had on Thursday flagged the possibility that the Rs.12.44 lakh crore figure reported by the central bank could be higher than the actual amount of withdrawn currency deposited with the banking system since the November 8 demonetisation announcement due to double counting.

“Regarding the figures in the media, and even the RBI has released some figures, on the notes that have come back, there are a lot of areas where we feel there could be double counting,” Mr. Das had said last week at a press conference.

Data verification

The Ministry of Finance had identified specific areas and asked the central bank and the banks to again verify the data, Mr. Das had said at the time, adding that the process of checking and counting was under way.

Bank officials, who did not wish to be identified, ruled out the possibility of double counting and said the RBI was publishing deposit data based on the amount of withdrawn currency that had been returned countrywide to the chests.

“Specified Bank Notes (SBNs) of Rs.500 and Rs.1,000 returned to RBI and currency chests amounted to Rs.12.44 lakh crore as of December 10, 2016,” R. Gandhi, Deputy Governor of the RBI, had said on December 13.

There were 4,075 currency chests as at the end of March, of which more than 95 per cent are managed by public sector banks.

Currency chests

The possibility that double counting may have taken place is suggested by some economists who have said that some banks, which do not have their own currency chest, may have deposited the withdrawn notes in a chest of another bank. This in turn could have led to both, the bank making the deposit and the bank tallying the deposits made at the chest, reporting the same figures separately to the central bank, they claim. There are many banks, particularly private sector and cooperative banks, that do not have their own currency chests.

As on November 8, the value of banknotes that ceased to be legal tender from the next day was Rs.15.44 lakh crore, according to the government.

Banks had started to accept deposits of these notes from the public from November 10.

The Centre had expected Rs.10 lakh crore to come back into the banking system, as per the Attorney General’s submission to the Supreme Court last month.

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Printable version | Oct 24, 2021 7:46:03 AM |

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