Demonetisation has pushed credit growth to historic low: SBI Report

Bank of America-Merrill Lynch on Wednesday almost halved its estimate of RBI dividend from black cash money not returned to banks to Rs 50,000 crore from Rs 95,000 crore earlier, as banks are reported to have collected over Rs 14 lakh crore out of the Rs 15.44 lakh crore in demonetised notes deposits by December 19.

"If we assume that RBI continues to print as it is doing as of now, things will be closer to normal by February-end", the SBI report said.

The Central Bank said,"There had been various estimates on Specified Bank Notes (SBNs) tendered in certain sections". "If this is the case, the possibility of a GDP bounce-back faster than anticipated may not be ruled out".

The final figure is expected to be higher as those who were overseas between November 9 and December 30 have till March 30 to deposit the scrapped notes, while Non-Resident Indians can make the deposits till June 30.

NRIs and Indians returning from overseas will have to physically show the junked 500 and 1,000 rupee notes to Customs officials at the airport and get a declaration form stamped before they can deposit the demonetised currency in RBI during the grace period. "Now that the scheme has come to an end on December 30, 2016, these figures would need to be reconciled with the physical cash balances to eliminate accounting errors/possible double counts etc", the RBI said.

However, as the release said, this facility is subject to the Foreign Exchange Management (Export & Import of Currency) Regulations, 2015.

RBI said that it was taking all steps to complete the process expeditiously so as to release firm figures of demonetised currency received at an early date.

According to the weekly data that RBI puts out, between November 4 and December 30, total currency in circulation contracted from Rs 17.97 lakh crore to Rs 9.38 lakh crore.

The RBI had reported that as of December 10, withdrawn banknotes amounting to ₹12.44 lakh crore had been returned to the RBI and currency chests.

The RBI has made it clear that it would not accept the banned notes from anyone except for those who were overseas during the period allowed by the government to deposit them at the banks.

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