The country’s biggest bank State Bank of India saw nearly Rs 40,000 cr deposited by the public in its branches in the first two days of the ongoing currency swap.
A total of Rs 1,666 cr worth of notes were exchanged.
Under the ongoing currency swap, bank customers can get up to Rs 4,000 worth of new currency notes in exchange for old currency from banks and post offices.
Any extra money they need to convert has to be deposited. Once deposited, they can withdraw Rs 20,000 over two days.
Compared to the first day, there was a decline of 20% in the amount deposited in the second day (today).
However, the total cash exchanged increased on the second day to 943 cr from 723 cr on the first day.
SBI’s number — 40,000 cr — indicates that the total amount deposited by the public overall would be in the range of Rs 1 lakh cr.
According to the Reserve Bank of India, the total amount of money held in the form of 500 and 1000 rupee notes in circulation in India is around 14.2 lakh cr.
If we estimate the total amount of money deposited in the first two days as Rs 1 lakh cr, it would imply that about 7% of the total 500 and 1000 rupee notes have come back for exchange.
If, by the end of December, only 70% of the total notes outstanding comes back for exchange, that would mean that 30% of the money held in the form of 500 and 1000 rupee notes was black, and was destroyed by its owners.
However, if all 14.2 lakh cr worth of notes comes back into the banks for exchange, it would mean that either there was no black money that was held in the form of currency notes, or that the black money holders found effect ways of turning that money into ‘white’ money.