RBI report on demonetisation: Digital transaction up initially, but declines to 5-month low; here is why

By: | Updated: August 31, 2017 8:15 AM

On the grounds of digital transactions, as per the data by RBI data, it showed that the volume of electronic payments, which was at its peak in the month of December, has been on a decline.

As per the report, in month of December 2016, 957.50 million transactions were made as compared to 671.49 million in November last year. (Representative Photo: PTI)

In the data released by the Reserve Bank of India (RBI) in its annual report on Wednesday pointed out that the four key objectives of the demonetisation exercise that was outlined by the NDA government in November last year, could either be classified as work-in-progress or being simply difficult to achieve. The four objectives were – detection of black money, elimination of fake currency, squeezing funds available for terror funding and promotion of digital transaction.

RBI had yesterday disclosed that almost 99 per cent of Rs 500 and Rs 1,000 currency notes which were withdrawn from circulation on November 8, 2016 has returned to the central bank. “Subject to future corrections based on verification process when completed, the estimated value of SBNs received as on June 30, 2017, is 15.28 trillion,” the central bank said in its annual report.

Now that close to 99 per cent of the scrapped currency have flowed back into the banking system, the black money arguement does not hold the water. According to the Indian Express, it is evident that the bulk of black money is trapped in sectors such as real estate, gold and held overseas.

On the grounds of digital transactions, as per the data by RBI data, it showed that the volume of electronic payments – including transactions through systems such as NEFT, debit and credit cards, cheques, prepaid wallets, UPI and mobile banking – which was at its peak in the month of December, has been on a decline. As per the report, in month of December 2016, 957.50 million transactions were made as compared to 671.49 million in November last year. Even as there was a blip in March to 893.89 million transactions, the volume has since come down to 862.38 million transactions in July. The overall data reflects the dip of digital transaction a five-month low.

The RBI data cast light on the elimination of high-denomination fake currency. The data showed that the number of counterfeit notes detected during 2016-17 grew 20 per cent to 7.62 lakh pieces from 6.32 lakh pieces in 2015-16. In the year 2014-15, the RBI had detected 5.94 lakh pieces of fake currency notes, reported Indian Express.

 

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