What policymakers will need to learn from the demonetization exercise
The latest estimates suggest that of the total amount of specified bank notes (SBN) of 500 and 1,000, 99.3% have come back to the banking system
It has been almost two years since the demonetization of 8 November 2016, but why it was done and what it achieved continues to be a matter of debate. The latest annual report of the Reserve Bank of India (RBI) has now confirmed what was already known to everybody—that demonetization failed to provide any windfall gain to the government. The latest estimates suggest that of the total amount of specified bank notes (SBN) of ₹ 500 and ₹ 1,000, 99.3% have come back to the banking system. The remaining 0.7% or more are stuck with international banks, such as the Rashtriya Nepal Bank (RNB) and other neighbouring countries, where Indian currency was used as legal tender.