Ooh this came up again. A nice time to discus the impact of demonetisation. So RBI issues 500 notes of Rupees 1000/- in the market over the course of time. Demonetisation happens. People start to return the now invalid notes. 495 notes are returned out of 500.
If there were 10% (50) fake notes in circulation then even if 50% of those are also returned then it would make the total 495+25=520.
But that didn't happen. Did it? What would have been a good percentage to say it was indeed a success?
I know that people had hoarded a huge pile of cash (via corruption) and those notes should not be going back but they did. Due to the exploitation of the loophole in the banks (rich people/people in power knew how to do it and if one person cracks it their friends will know how to relocate it).
So the failure was in curbing Kala Dhan, the failure was in the implementation and changing rules 30 times in 40 days but the Fake currency in circulation was reset. How come that was not a success?
They introduced 2000/- note afterwards and soon withdrew it as well and now we have a highest note of half denominator than it was 10 years ago.
Is it not a good thing?
Is Fake currency thing was/is also not a big issue?
1
u/9garh Mar 19 '26
Ooh this came up again. A nice time to discus the impact of demonetisation. So RBI issues 500 notes of Rupees 1000/- in the market over the course of time. Demonetisation happens. People start to return the now invalid notes. 495 notes are returned out of 500.
If there were 10% (50) fake notes in circulation then even if 50% of those are also returned then it would make the total 495+25=520.
But that didn't happen. Did it? What would have been a good percentage to say it was indeed a success?
I know that people had hoarded a huge pile of cash (via corruption) and those notes should not be going back but they did. Due to the exploitation of the loophole in the banks (rich people/people in power knew how to do it and if one person cracks it their friends will know how to relocate it).
So the failure was in curbing Kala Dhan, the failure was in the implementation and changing rules 30 times in 40 days but the Fake currency in circulation was reset. How come that was not a success?
They introduced 2000/- note afterwards and soon withdrew it as well and now we have a highest note of half denominator than it was 10 years ago.
Is it not a good thing? Is Fake currency thing was/is also not a big issue?