As of December 30, banks have received Rs 14.97 trillion in old currency, the report states.
PM Narendra Modi’s much hyped demonetistation move against black money and corruption has been dealt a severe blow as almost 97% of the banned currency has been accounted for and deposited in banks.
Banks have received 14.97 trillion rupees as of Dec. 30, the deadline for handing in the old bank notes. Banks have disbursed about 8 trillion rupees in new currency bills, the people with knowledge of the matter said. The figures of bank notes deposited are provisional and may change, they added. Finance Ministry's spokesman D.S. Malik didn't respond to a call and a message sent to his mobile phone.
Indians have deposited nearly all the currency bills outlawed at the end of the deadline last year, according to people with knowledge of the matter, dealing a blow to Prime Minister Narendra Modi's drive to unearth unaccounted wealth and fight corruption.
Indians have deposited currency bills for almost all the banned notes by the December 30 deadline, a Bloomberg report by Siddhartha Singh and Bibhudatta Pradhan states. A full validation of the bank notes is a set back for Modi who had been relying on this move to burnish his administration's corruption fighting credentials and boost its popularity ahead of key state elections. The anti-corruption measure has dented economic growth and forced millions into lengthy bank queues, although it remains broadly popular.
As of December 30, banks have received Rs 14.97 trillion in old currency, the report states.
Around Rs 5 trillion of the Rs 15.4 trillion rendered useless since demonetisation was announced on November 8, had been estimated by the government to be black money since it had not been declared.
“The prime minister had been ill advised and the government was not prepared to handle the situation. The government expectation has been belied,” said Nilakantha Rath, honorary fellow at the Indian School of Political Economy.
Although the serpentine queues outside banks and ATMs which were seen in the immediate aftermath of the demonetisation announcement have reduced, popular opinion remains divided over whether the move was warranted.
There are indications that India which is one of the world’s fastest growing economies could be hurt by the cash clampdown.
For the second straight month, the Nikkei India Services Purchasing Managers’ Index contracted in December, the report adds.