Shame on RBI over demonetisation decision, says Chidambaram

New Delhi, Aug 30 (IANS) Senior Congress leader P. Chidambaram on Wednesday hit out at the government and the RBI over the demonetisation decision, saying that only one percent of the junked notes had not returned to the central bank and it was a "shame."

Chidambaram, a former Finance Minister, said that 99 per cent of the scrapped Rs 500 and Rs 1,000 notes had been legally exchanged and asked if the demonetisation decision of the Narendra Modi government was designed to convert black money into white.

In a series of tweets, Chidambaram also said that the cost of printing new currency was more than the money gained by the Reserve Bank of India.

"Rs 16,000 crore out of demonetised notes of Rs 1,544,000 crore did not come back to RBI. That is 1 per cent. Shame on RBI which 'recommended' demonetisation.

"RBI 'gained' Rs 16,000 crore, but 'lost' Rs 21,000 crore in printing new notes! The economists deserve a Nobel Prize," Chidambaram said, sarcastically.

He said "99 per cent notes legally exchanged! Was demonetisation a scheme designed to convert black money into white?"

The RBI said on Wednesday that of the Rs 15.44 lakh crore of notes taken out of circulation, Rs 15.28 lakh crore had returned to the system by way of deposits by the public.

According to the Reserve Bank of India's (RBI) annual report for the last fiscal, 89 million pieces of the banned Rs 1,000 totalling Rs 8,900 crore had not been returned, out of 6,700 million such notes. This amounts to 1.3 per cent of the Rs 1,000 notes in circulation before the demonetisation announcement on November 8, 2016.