The demonetisation was hailed as a step that would curb black money, corruption and check counterfeit currency but RBI said, "Counterfeit notes detected in SBNs decreased by 59.7 and 59.6 per cent in the denominations of Rs 500 and Rs 1,000, respectively".
It took almost two years for RBI to complete the tasks of processing and verifying banned currency notes, its annual report showed.
"That alone was a loss of Rs 2.25 lakh crore a year", he said.
Even after two years of demonetisation, the Reserve Bank of India (RBI) on Wednesday said that Rs 10,720 crore of the junked currency has not yet been received by the banks.
On November 8, 2016, Prime Minister Narendra Modi announced that all Rs 500 and Rs 1000 notes, comprising 86% of the total value of the currency in circulation at that time, would no longer be recognised as legal tender.
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The RBI has also revealed that post demonetisation, RBI has spent Rs 7,965 crore in 2017-18 on printing new Rs. 500 and Rs. 2,000 and other denomination notes. For instance, parts of the Rs 10,000 crore could lie with money seized by law enforcement, cash still being held with district cooperative banks and in bank notes being held by citizens of Nepal and Bhutan.
In value terms, the share of Rs 500 and Rs 2000 banknotes, which had together accounted for 72.7 per cent of the total value of banknotes in circulation at end-March 2017, increased to 80.2 per cent as at end-March 2018.
Collateral damage as a result of the rise in printing the notes and other cost was dividend RBI pays to the government. The volume of banknotes, however, increased by 2.1 per cent. More than 100 lives were lost in the panic to exchange old notes for new ones, millions of daily-wage earners lost their livelihood for several weeks, thousands of small and medium enterprises were shut down and many jobs were destroyed, he said via Twitter.
The RBI said the value of banknotes in circulation increased by 37.7 per cent over the year to ₹18,03,700 crore as at end-March 2018.
"It has helped India move faster towards a digital economy".
PM Modi's decision to ban high-value currency notes, along with a chaotic introduction of the goods and services tax last year, acted as a drag on economic expansion with provisional data showing growth slumped to a four-year low of 6.6 percent in the fiscal year 2018.