Some nations still have old notes, exchange unlikely

NEW DELHI: The government is yet to take a decision on substantial quantities of demonetised Indian currency floating around in countries like Nepal, Bhutan, Bangladesh and Zimbabwe, the finance ministry informed Parliament's finance standing committee on Thursday.

Economic affairs secretary Subash Garg is understood to have told the committee that some amounts of Indian currency comprising the demonetised Rs 500 and Rs 1,000 notes were yet to be returned. Some of India's neighbours where Indian currency is in use have raised the matter with New Delhi.

The possibility of older high-value denominations — the government did not specify the likely value held in these nations — being accepted is remote as the Centre has strongly opposed opening fresh windows even for Indian citizens. With 99 per cent of demonetised notes returned to banks, the prospect of more deposits being accepted by Indian banks or the RBI is low.


The discussion on demonetised currency still held abroad provided an interesting twist to the deliberations of the committee, which is preparing a report on note ban and digitisation. The report, however, is likely to take some more time in preparation as the committee has sought additional information from several government departments and agencies.

Members said the committee needed to hear representatives of industry chambers, the ministry of corporate affairs and agencies like the Enforcement Directorate and the Directorate of Revenue Intelligence. The MPs also sought information from senior officials — financial services secretary Rajiv Kumar, CBDT chairman Sushil Chandra and Garg — about the parameters on which the outcomes of demonetisation should be evaluated.

Congress MPs are understood to have argued that demonetisation had adversely affected “brand India” while others like Rajya Sabha member Rajiv Chandrasekhar backed the measure.

Committee chair Veerappa Moily is understood to have noted that while a draft report could be readied, more information on the impact of demonetisation was needed. Ministries like agriculture and commerce would be spoken to and some state government views incorporated as well.

The officials who met the committee on Thursday iterated that about Rs 16,000 crore of demonetised currency had not returned to banks and that the cost of printing new currency was about Rs 7,000 crore. Previously, the RBI had said it was yet to complete the counting of deposited demonetised notes.