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RBI guv to face par panel on note ban next month

Central bank expected to submit a written reply before standing committee in July first week on the status of demonetized notes of Rs 500 and 1000

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Urjit Patel
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The Reserve Bank of India (RBI) governor Urjit Patel has got more time for the second briefing before the Parliamentary Standing Committee on Finance over the note-ban issue. He will appear on July 6 with the data on demonetization.

Some members of the committee were not available to attend the meeting earlier scheduled for Thursday (June 8).

A committee member told DNA Money that some members were unable to attend the meeting, which could have been a reason to postpone it.

RBI is expected to submit a written reply before standing committee in July first week on the status of demonetized notes of Rs 500 and 1000.

The panel had questioned Patel on January 18 on the move to ban the high-value notes.

The governor and his team will face the questions on the gap of note circulation, counterfeit currency neutralisation and balance-sheet status of RBI.

A RBI source said, "RBI has almost completed the homework barring some points that are still under process."

RBI governor has been asked to present the post demonetization status before the committee.

From physical verification of surrendered notes to sorting out counterfeit and evaluation of financial implication of these notes has made counting of the notes a big task, said RBI sources.

The RBI has implemented demonetization in two steps -- accept the demonetized high-value notes and exchange them and remonetize via banks and own offices.

The central bank, which is responsible for production, management, and circulation of currency, supplies on an average 22 billion pieces of notes to banks every year, out of which 15.7 billion (17%) are Rs 500 and 6.3 billion (7%) Rs 1,000 notes. In 2015-16, RBI was able to mint 4.3 billion pieces of 500 notes and about 1 billion of Rs 1,000 notes.

In 1946, just after Second World War, RBI had demonetized high-value currency, and less than 10% of the value of high denomination notes was not returned. Similarly, in 1978, only 14% did not return to the central bank.

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