Reserve Bank of India – Annual Report Including Demonetization Outcome

The RBI report includes demonetization outcome as well. In times of cash crunch apply for a personal loan by going to www.loansingh.com

Reserve Bank of India – India’s central banking institution, has released its annual report for the financial year 2017-2018. The report focused on a number of subjects such as banking system’s asset quality, the outcome of the government’s demonetization drive of 2016 and also the value of the India rupee.

Although the report covered a host of financial touch points in its 245-page report, we will focus on the Demonetization drive that was conducted close to 2 years ago and gauge its outcome.

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Key Points of RBI Annual Report

  • The country is still not immune to a turmoil in the financial market
  • The structural reform is set in place, which will further growth
  • The change in demand-supply arrangement in the foreign oil market can impact trade deficit
  • The production related to agriculture will stay strong
  • FDI flows will be financing the current account deficit
  • CPI target has to be met, guided by the credit policy
  • Inflation could be face risks during the course of the year
  • The real GDP growth is expected to accelerate to 7.4% in FY19
  • Manufacturing is gaining speed on the back of new businesses
  • The economic outlook can get a Philip thanks to a turnaround in capital formation
  • The gross NPA ratio of banks could rise by FY19
  • There could be fiscal risks surfacing from states going to poll

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Demonetization Drive of 2016

On November 8th 2016, Prime Minister of India, Shri. Narendra Modi had announced that the Rs.500 and Rs.1000 currency notes circulating at that time would cease to be used as legal tender. Some pointers from the drive include

  • Daily limit of Rs. 4,000 for withdrawal from ATMS and of Rs. 10,000 for withdrawals from banks between 10th November and 30th December 2016
  • All Government run Hospitals will accept Rs.500 and Rs.1000 currency notes for payment towards medical treatment
  • As will government run pharmacies – based on doctors’ prescription
  • Same for government run railway ticket booking, government bus, airports (buying of tickets only), petrol stations, CNG retail outlets, milk booths, general & ration stores, and crematoriums
  • Foreign nationals visiting India can exchange their Rs.500 and Rs. 1,000 currency notes up to the limit of Rs. 5,000 only

Non cash transactions such as Cheque, Demand Draft, Credit Card and NEFT transactions remained unaffected.

RBI Demonetization Annual Report  

The RBI reported that the verification and process of old currency notes have been completed. The total amount of Rs.500 and Rs.1000 notes in circulation as on November 8th 2016 is Rs.1541793 Crore. Out of that, 99.3% of the old currency has come back into the banking system.

The report also mentions that Rs.15.41 lakh crore worth of Rs.500 and Rs.1000 notes are taken out of circulation. Rs.10720 crore of old currency is yet to return to the banking system. The household cash savings has risen to 2.8% of the national income. This is supposed to be the highest ever in the past few years. The cost of the demonetization drive towards printing the new currency is Rs.7965 crores.

The banned currency was verified, counted and processed using a ‘high speed currency verification and processing system’, which was later shredded. Fake notes in banned Rs.500 and Rs.1000 notes have decreased by 59.7% and 59.6% respectively.

It was during the perilous times of demonetization in 2016, that Loan Singh came to the aid of a number of salaried individuals though personal loans. With no cash available, it was easier for loan applicants to avail instant online personal loan.

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