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December 2016
 |
Bank Notes (The Total Investment & Insurance
Solutions)
Since the Prime Minister announced
demonetisation on November 8, there has been a lot of calculation and research
being done, on how much money will come back to the system and how much will
not. Dr Soumya Kanti Ghosh calculates that that around Rs2.5 lakh crore will
not be returned to the system. Here is his logic. The Total Investment & Insurance Solutions
As of November 9, 2016, the amount of high
currency denomination notes was Rs15,441 billion, excluding the cash with
banks. Till date the Reserve Bank of India (RBI) has published data regarding
the deposited/exchange notes, twice, with a gap of 9 days, 10-18 November and
19-27 November.
The total money deposited/exchanged during
the period 10-18 November was Rs5,446 billion, with an average of Rs605 billion
per working day and during the period 19-27 November was Rs3,004 billion, with
an average of Rs501 billion per working day. This shows a 17% decline in
average working day deposit/exchange money. The Total Investment & Insurance Solutions
As is evident from the data, the daily
deposit average is on a declining trend. The remaining three days of November
can be conservatively assumed to have an average of Rs375 billion per day (25%
less than what came during 19-27 November) i.e. a total of Rs1,125
billion.
Breaking December into three different
periods, a total of Rs3,360 billion can be assumed to be returned to the system
(Rs1,500 billion between 1-7 December, Rs900 between 8-15 December and Rs960
between 16-30 December). As per the assumptions, Rs10 billion will be deposited
during 1 January to 31 March 2017. The
Total Investment & Insurance Solutions
Adding these numbers up, Rs12,945 billion
will be returned to the system against Rs15,441 billion as of November 9, 2016
and Rs2,496 billion will not be returned, as per SBI researchThe Total Investment & Insurance Solutions
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