Note-ban 3rd anniversary:Cash demand soars 20.14% to Rs21.6tln Mumbai, Nov 8 (PTI) The currency in circulation hasjumped a whopping 20.14 percent to scale Rs 21.59 lakh crore,show the latest Reserve Bank data released on Friday, which isthe third anniversary of the controversial note-ban.
Reducing the cash dependency in the economy by makingpeople use alternatives like digital payments was one of thestated motives of the decision to cancel as much as 87.6percent of the currency in circulation on November 8, 2016.
The badly implemented decision led to many peoplelosing their lives while standing in serpentine queues towithdraw money or deposit the banned currency bills, andcrippled the economy.
On November 8, 2016, the government and RBI pulled outRs 500 and Rs 1,000 denomination notes from the system in asurprise move. Unsuspecting people deposited virtually theentire stock of the banned notes with banks, putting a bigquestion marks over the efficacy of the exercise.
The RBI data on Friday showed the currency with thepublic grew 15.2 percent to Rs 21.59 lakh crore as of thefortnight to October 25, as against Rs 17.97 lakh crore onNovember 4, 2016.
However, the growth of currency in circulation seemsto be slowing down as it had grown 21.1 percent in the lastyear over the previous year.
According to the RBI data, there has been a 5.2percent addition to the cash economy with the public betweenApril 1 and October 25, 2019, which is slower compared to 6.6percent growth a year ago.
Apart from prodding the people to move to digitalwhich would have helped arrest the growth of black money, theoriginal move was also aimed at curbing fake currency apartfrom restricting insurgency activities.
After falling massively post-demonetisation by nearlyRs 10 lakh crore, the currency in circulation has recouped ata faster pace, and it took over 16 months for the levels to goback to the pre-demonetisation levels.
Digital payments have grown manifold over time and theUPI volumes hit 1 billion transactions-mark in a single monthof October. PTI AABEN BEN