Finance Minister Arun Jaitley on Thursday said not all money that came back into the banking system after demonetisation was legitimate, as he referred to the Reserve Bank of India’s data on note ban released on Wednesday.
The RBI in its Annual Report 2017 released on August 30 has said it received Rs 15.28 lakh crore worth of scrapped currency notes of Rs 1,000 and Rs 500 denomination, which is 1 per cent less than the total value of currency notes in circulation at the time of demonetisation. Around 99 per cent of total currency in circulation valuing Rs 16 lakh crore has returned, the central bank disclosed while adding slightly more than 1 per cent currency notes were not returned.
The Modi government had on November 8 last year withdrew overnight legal tender status of old Rs 1,000 and Rs 500 notes as part of its fight against black money, counterfeiting, and unaccounted political funding.
“The fact that money got deposited in banks does not make it legitimate money. My next step is going to be to put an end to black money used in elections,” he said. The RBI for the first time in past ten months came up with figures on demonetisation. Earlier, it had refused to divulge information on note ban citing ‘national interests’ while rejecting an RTI plea.
Jaitley, who was speaking at an economic summit, said private sector will have to pay up, or let someone else take over. “Bad loan resolution process will take time, cannot have a surgical solution to it.” says Jaitley. Indian banking sector is ailing with a burden of huge debt. Estimates say banks are staring at bad loans in the range of Rs 8 to 11 lakh crore.
Jaitley also reiterated what he has earlier said on many occasions, “Demonetisation will benefit in medium and long term even if it hits GDP in two or three quarters. Fallout expected out of demonetisation is on predicted lines.”