Mumbai: The Reserve Bank of India (RBI) said on Tuesday that the banking system had received deposits worth Rs12.4 trillion in the month till 10 December, after the government invalidated high value currency. Banks have remained open for most days through this period after Prime Minister Narendra Modi announced that Rs500 and Rs1,000 notes would no longer be legal tender.
According to data released by the RBI, Rs14.2 trillion worth currency notes of Rs500 and Rs1,000 denominations were in circulation as on 31 March.
The central bank has been issuing more currency notes and public can “freely spend their notes instead of hoarding,” RBI deputy governor R. Gandhi said in an interview to Press Trust Of India (PTI) and Doordarshan News.
The amount of old currency notes deposited at bank branches has consistently risen over the last month. According to data released by the banking regulator, banks had collected Rs11.55 trillion as on 6 December and Rs8.44 trillion as on 27 November.
In comparison, the central bank had released currency notes worth Rs4 lakh crore back in to the system as on 5December, Gandhi had said during a press conference to announce the monetary policy review.
The regulator is also stepped up its surveillance of the whole process to pre-empt instances of cash hoarding and conversion of illicit cash using bank branches, after a few cases were uncovered by investigative agencies such as the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED).
The ED had arrested two officials of Axis Bank Ltd in Delhi last week stating that they were helping money launderers convert banned currency notes into gold. Following this, Axis Bank has suspended 19 officials, according to a New Indian Express report on 7 December.
According to RBI deputy governor SS Mundra, the regulator has issued detailed instructions to banks about central data checking, retaining old CCTV footage and counterfeit note reporting.
“If they find any inconsistencies, they should be pursued further through their internal mechanisms. RBI supervisors are also carrying out a similar exercise on various data points from banks and whenever any untoward transaction is noticed, due action would be pursued, investigation would be done,” he added.
On Tuesday, there were media reports about an RBI official who was arrested by the CBI in relation to a black money case in Bengaluru. According to Mundra, the official is a junior functionary of the RBI and has been temporarily suspended, pending investigation.
“The RBI and its team is also cooperating and collaborating with various investigative agencies as they come back with details of the actions noticed by them,” Mundra said.