(Updates with quote, details, background)
By Suvashree Choudhury
MUMBAI Dec 13 Indian banks have taken back
12.44 trillion rupees ($184.24 billion) of high-value currency
that the government abruptly abolished last month, Reserve Bank
of India Deputy Governor R Gandhi said on Tuesday.
That represents about 80 percent of the 15.44 trillion
rupees in 500- and 1,000-rupee notes that were circulating
before Prime Minister Narendra Modi abolished them on Nov. 8, in
a surprise move targeting counterfeiters and people holding
Analysts had estimated that only about 13 trillion of those
abolished notes would be deposited at banks, because people with
undeclared cash would be wary of attracting the scrutiny of tax
Indians have until Dec. 31 to turn in their old notes.
Economists said total deposits were likely to reach about 13
trillion to 13.5 trillion rupees by the end of the year, in line
with the estimates.
"The old notes of 500 and 1000 rupees which have been
returned back to the Reserve Bank and the currency chest
amounted to 12.44 trillion rupees as of Dec. 10, 2016," Gandhi
said in a short news briefing.
The RBI has printed some 1.7 billion new 500- and
2,000-rupee notes, which will replace the abolished notes,
Gandhi said. That is a fraction of the 24 billion individual
notes that were withdrawn.
Modi's action has created a widespread cash shortage that
has hit many aspects of the economy, from manufacturing to
But Modi says it was necessary to crack down on India's
shadow economy, although Indians have resorted to ingenious ways
to try to deposit their undeclared assets, such as splitting up
their money and paying others to temporarily park it in their
The government and the RBI have vowed strict action against
those believed to be trying to deposit undeclared assets,
including tougher scrutiny of all deposits of more than 250,000
The RBI on Tuesday also asked banks to keep all CCTV footage
from Nov. 8, in another bid to scrutinise depositors
A source at India's Central Bureau of Investigation, a
federal investigative agency, told Reuters on Tuesday it had
arrested an RBI officer in the southern city of Bengaluru for
"unauthorised changing" of 600,000 rupees in old 500- and
RBI Deputy Governor S.S. Mundra, at the same news briefing,
said a junior central bank official had been "suspended" because
"he was recorded to be present in a bank branch where some
suspected transaction was happening."
"We have instituted investigation and due action would be
taken once the details are ascertained," Mundra said.
($1 = 67.5199 Indian rupees)
(Additional reporting by Abhirup Roy, Devidutta Tripathy in
MUMBAI and Aditya Kalra in NEW DELHI; Editing by Rafael Nam,