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Currency With Public Reaches Record High Of Rs 18.5 Lakh Crore, Shows RBI Data

DIVYIA ASTHANA | 0
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| June 10 , 2018 , 14:09 IST

Currency with the public, which is calculated by deducting cash with the banks from the total currency in circulation, has reached a record high of over Rs 18.5 lakh crore, more than double the low amount of Rs 7.8 lakh crore after demonetisation in 2016, RBI data showed on Sunday.

The Reserve Bank of India (RBI) data also showed that the total currency put into circulation had also doubled, from the Rs 8.9 lakh crore post demonetisation to the current over Rs 19.3 lakh crore.

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The amount of currency present with the public indicates that the cash crunch reported in various parts of the nation a few months back had likely taken placed due to hoarding of cash or creating an artificial currency shortage.

The demonetisation on November 8, 2016, witnessed nearly 86 percent of the currency in circulation at the time becoming invalidated overnight. However since then, the government has introduced Rs 2,000, Rs 200 and new Rs 500 currency notes, increasing the amount of currency in circulation.

In May 2014, before the Prime Minister Narendra Modi government took charge, the currency with the public was around Rs 13 lakh crore, which grew to Rs 14.5 lakh crore in 2015 and then to Rs 16.7 lakh crore in May 2016

The total money supply, denoted by the RBI as M3 includes currency with the public, deposit money of the public and the time deposits with the banking system currently stand at over Rs 140 lakh crore, around 11 percent higher than the year-ago level.

The M3 was below Rs 100 lakh crore before the Modi government came into power and during demonetisation reached around Rs 120 lakh crore.