The Mystery Unveiled: RBI and the Unresolved Demands of Demonetization

Well, this is my first answer as an anonymous user. The reason behind this anonymity is the nature of the answer that no one seems eager to hear or believe. The demonetization move was purportedly to get the quantum of 500 and 1000 rupee notes back. However, what the Reserve Bank of India (RBI) knew, but no one else did, was the significant amount of fake or duplicate notes among these denominations.

Aiming to Uncover the Truth

When banks deposited the collected denomination into currency chests, RBI knew what amount all the currency chests held. However, they chose not to disclose the figures until the numbers were re-verified from their end. Why? The potential consequences could be catastrophic.

Imagine a scenario where an economy has 100 rupees in circulation, as per the central bank's figures, with 40 of those being fake. If 110 of these 140 rupees were returned to the banks during demonetization, it would be a severe economic failure, both for the government and the RBI.

It might seem unlikely to accept fake notes, but many bank cashiers will confirm the frequency with which they accepted counterfeit currency, often having to make up the difference from their own pockets. During demonetization, banks were under immense pressure due to the high volume of work, which increased the possibility of accepting fake currency.

Theorical Analysis and Reality

The DeMo (democratic money) was not carried out in a well-organized manner. Queues were long, and cashiers were under significant pressure. There were insufficient machines, leading to a lot of manual counting. Some cashiers were inexperienced, and all were under great pressure. This led to the discovery of many fake notes in the bank vaults.

The consequences are clear. As per the amounts shown by the banks, RBI might have received more notes than those originally in circulation. RBI is now slowly counting the bundles and is debiting the concerned banks. The banks, in turn, will need to improve their positions to absorb the losses from redeeming fake fiat currency.

For now, the answer remains wrapped in mystery until RBI completes its task of counting the currency. Until then, we must wait and hope for clarity.

Best Regards,

A Common Banker