Demonetisation led to chaos for people, as to where should one deposit the banned currency notes. On, 8 November, Prime Minister Narendra Modi anounced demonetisation, this created panic among people, in his speech he said that people can go banks and exchange or deposit the old currency notes, even people can go to post offices to exchange old currency notes of Rs 500 and Rs 1000 with new currency notes.
Additionally, the Centre made provisions such as government offices will also accept the old currency notes of Rs 500 and Rs 1000. Railways and petrol pumps were also places of legal tender of old currency notes. This announcement led to long serpentine queues not just only outside banks but also in post offices and municipal offices (to pay bills, taxes).
Post offices and municipal offices, which were seen deserted for years, were filled with people. People who had made many reasons to avoid paying municipal taxes were standing in queues and paying their taxes. People who never went or avoided going to post offices where seen in queues in post offices to exchange their old currency notes. Soon as government announced old currency notes ban on the same there were long queues outside petrol pumps too.
For people demonetisation is headache and people are facing problems withdrawing money from banks, because many banks are cashless. But this is not the case with post offices and municipal offices, as they were only collecting agents.
While the window of a fortnight to exchange these currency notes over-the-counter at banks and post offices ended on 24 November, the old notes can be deposited in bank accounts until 30 December.
Here is a brief preview of the money deposited or tendered in banks, post offices and municipal offices.
The money flooded into banks as people rushed to deposit Rs 500 and Rs 1,000 notes – resulted in such a massive bonanza (in terms of deposits) that it’s pulling rates down, bankers said. Thus the longstanding complaint of the Reserve Bank of India (RBI) that banks weren’t passing on rate reductions may be addressed soon.
A total of Rs 2.99 lakh crore was deposited in banks from 19-27 November, and Rs 5.11 lakh crore deposited during 10-19 November period, as per data from Reserve Bank of India. This figure could go up to Rs 9 lakh crore. Withdrawal over the counter or through ATMs, stood at Rs 2.16 lakh croreduring the period 10-27 November, this was largely due to the cap on daily withdrawal limit and shortage of lower denomination notes.
People have deposited a staggering Rs 32,631 crore in nearly 1.55 lakh post offices across the country following demonetisation of old Rs 500 and Rs 1000 currency notes. The post offices have also exchanged about Rs 3,680 crore of old currency notes between 10-24 November.
“From 10-24 November, we have exchanged 578 lakh notes of value of about Rs3,680 crore. If you look at the deposits, Rs43.48 crore old Rs500 and Rs1000 notes were accepted as deposits, and their value is about Rs32,631 crore,” BV Sudhakar, the secretary for the department of posts, said on 27 November.
As many as 1.55 lakh post offices about 1.30 lakh in rural areas and the rest 25,000 in urban and semi-urban areas are playing an important role in the entire demonetisation process. Rs 3,583 crore was withdrawn from post offices, during the same period. Those without postal savings account were also permitted to exchange the old currency notes up to certain limit, by producing their identity cards.
Post offices from Maharashtra and Goa alone have collected as well as exchanged the demonetised currency notes worth around Rs 1,849 crore. Maharashtra and Goa have about 12,860 post offices together. Only 2,500 of these offices were exchanging the currency. More than1,500 crore of amount was deposited in postal accounts.
According to the Union urban development ministry’s estimates, the municipal tax collection for the 47 civic bodies had reached Rs 13,192 crore. Last November, the municipalities had collected just Rs 3,607 crore.
Mumbai has the maximum share of the increased tax collection at Rs 11,913 crore, which is 90% of the total revenue. This is over three times Mumbai’s collection for 2015 for the year-till-date period.
Close to 90 per cent of the total revenue has been collected in Mumbai alone with Rs 11,913 crore, which is three times the collections made last year.
Hyderabad has seen the maximum increase with collection being shot up to 26 times, Rs 206 crore was collected. Surat’s tax revenue zoomed to Rs 207 crorefrom Rs 29 crore collected in November 2015.
The collection could be attributed to state governments’ special schemes for taxpayers to pay their dues with the demonetised notes as people are settling all of their long pending dues in Rs 500 and Rs 1000 notes.