New Delhi: Despite much criticism, the Reserve Bank of India (RBI) has failed to give a credible account of the new notes supplied to the public.
In its latest press release on Wednesday, the RBI said it had sent out for distribution to the public 22.6 billion notes of various denomination worth Rs5.93 lakh crore.
But the break-up given, taken with its earlier statements, shows that the RBI's latest update is a mathematical impossibility. Indeed, the gap between what the apex bank claims it has disbursed and what, according to its own earlier numbers, it could possibly have disbursed, has now grown to over Rs66,000 crore.
This is assuming that 10 per cent of the high denomination notes distributed are of Rs500 variety. But even if we assume the highly unlikely scenario that all the notes supplied by the RBI were of Rs2,000 denomination, the math does not add up -- the shortfall would be around Rs34,000 crore.
On December 7, during the monetary policy press conference, the Deputy Governor of RBI, R. Gandhi, informed the media that a total of Rs4 trillion or Rs4 lakh crore had been disbursed to the public in new currency notes till the day before.
Of this amount, Rs1.06 lakh crore in value or 19.1 billion pieces were in smaller denomination currency notes while the rest— Rs2.94 lakh crore —was by way of high-denomination notes of Rs2,000 and Rs500.
On December 12, the RBI Deputy Governor told reporters that 21.8 billion pieces of notes were issued to the public till December 10, worth Rs4.61 trillion or Rs4.61 lakh crore. The next day, an RBI release on the deputy governor's statement said that 20.1 billion pieces of small notes from Rs10 to Rs100 were circulated, while the higher denomination notes amounted to 1.7 billion (or 170 crore) pieces.
According to the RBI, the increase in small notes between December 6 and December 10 was only one billion pieces (from 19.1 billion to 20.1 billion).
Even if all the small notes printed were of Rs100 denomination, it takes the value of small notes to Rs1.16 lakh crore (from Rs1.06 lakh crore) leaving Rs3.45 lakh crore to be covered by high denomination notes of Rs2,000 and Rs500. Assuming that only 10 per cent of the total 1.7 billion high denomination notes (170 million or 17 crore) were in Rs500 notes, its total value (17 crore x 500) amounts to Rs8,500 crore.
Rest of the 90 per cent (1.53 billion or 153 crore) of Rs2,000 notes amounts to (153 crore x 2,000) Rs3.06 lakh crore The value of these two high denomination notes amount to Rs3.14 lakh crore. That leaves a gap of Rs31,000 crore to be covered, which finds no explanation in any of the RBI's statements.
Now let's look at the latest RBI statement on December 21.
In this, the RBI says that 22.6 billion currency notes worth Rs 5.93 lakh crore were issued to the public by December 19.
