On 17th June, Free Press Journal published an explosive report claiming that Rs 500 banknotes worth as much as ₹88,032.50 crore were missing. Based on RTI replies on data submitted by banknote printing presses on notes sent and RBI data on notes received, it claimed that there was a huge mismatch of 1760.65 million pieces of the ₹500 notes for the year 2016-17. The claim was subsequently published by almost all other media houses citing the FPJ report and the RTI queries.
The Reserve Bank of India has already dismissed the claim. Now, based on the relevant documents based on which the claim was made by the RTI activist and FPJ, OpIndia can confirm that there are no missing ₹500 notes. Several crucial details, some of which are mentioned in the documents obtained by the RTI queries and cited in the report itself, were ignored, which led to the wrong calculation of data, leading to the assumption that notes were missing.
In the clarification issued late on the night on the same day when the FPJ report was published, RBI affirmed that all banknotes supplied from the printing presses are accounted for, and the report was based on an erroneous interpretation of information obtained under RTI. The central bank added that robust systems are in place for the reconciliation of banknotes printed at the presses and supplied to RBI which include protocols to monitor the production, storage and distribution of banknotes.
What the report claimed
The report is based on the RBI annual report, and the number of notes sent by three currency printing presses to the RBI, which are Bharatiya Reserve Bank Note Mudran (P) Ltd (BRBNML), Bank Note Press in Dewas (BNP), and Currency Note Press in Nashik (CNP). The latter were obtained through RTI, while RBI’s annual report is available on its website.
According to the report, in the year 2016-17, the number of notes sent by these three presses was 5,195.65 million pieces from BRBNML, 1,953.000 million pieces from BNP Dewas, and 1,662 million pieces from CNP Nashik, totalling 8,810.65 million pieces of “new ₹500 notes”. According to the report, in the same year, RBI received only 7,260 million pieces of ₹500 notes, and therefore there is a mismatch of 1550.65 million pieces.
It further claims that 375.45 million pieces of the newly designed ₹500 note were printed by the CNP, Nashik between April 2015 and December 2016, but RBI records show it received only 345. It adds that 210 million pieces of ₹500 notes, printed between April 2015 and March 2016 at CNP Nashik, were sent to the RBI, but it is not mentioned in the RBI report, and therefore these notes are also missing.
Adding the “missing” 1,550.65 million pieces for 2016-17 and 210 million pieces for 2015-16 from CNP Nashik, the report concluded that 1,760.65 million banknotes of ₹500 denomination are “missing”, amounting to ₹88,032.50 crore.
While the RBI clarified that the numbers were wrongly interpreted, the brief clarification didn’t include an explanation of how the numbers were misinterpreted. To understand what exactly happened and how Free Press Journal arrived at the conclusion, OpIndia contacted the writer of the story, Dharmesh Kakkar, to learn about the documents relied upon.
When we received the documents, which are annual reports on notes printed by various security printing presses and RBI report on notes received, we analysed them minutely. It was found while examining the documents that the number of notes sent by the presses actually matches the number of notes received by RBI for the year 2016-17, and there is no difference as claimed in the report. RBI was correct in saying that numbers were interpreted wrongly.
Crunching the numbers
Citing the Currency Management chapter in the annual report of the RBI for 2016-17, the report claims that RBI received 7,260 million pieces of ₹500 notes from the presses. The report is available on public domain, and when we checked, we made a stunning discovery. The report actually has two numbers for ₹500 notes for the year 2016-17, MG series and New design.
The RBI report states that in 2016-17, it received 2,013 million pieces of old ₹500 notes, apart from 7,260 million pieces of new notes. Therefore, RBI received 9,273 million pieces of ₹500 notes, including both demonetised and new versions.
RBI received two versions of ₹500 notes in 2016-17 because the demonetisation of old ₹500 notes and ₹1000 notes took place in that year, in November 2016. It has been reported that the decision of demonetisation was kept a top secret, and the printing presses were printing old ₹500 notes till days before that.
It was earlier reported based on an RTI query that the last batch of old ₹500 was printed on 27 October 2016 at Bharatiya Reserve Bank Note Mudran (P) Ltd, just days before demonetisation was announced on 8 November 2016. Moreover, the printing of new notes at BRBNMPL began on November 23, as per another RTI response. A Times of India report from 13 November 2016 states that the printing of new ₹500 notes started at CNP Nashik two weeks ago, which means the last days of October or the start of November.
Now, if we analyse the numbers obtained from the three presses, we can find that Bank Note Press in Dewas has given two numbers. In 2016-17, this press supplied 462 million pieces of old ₹500 notes, and 1,953 million pieces of new ₹500 notes. Therefore, a total of 2,415 million pieces of ₹500 notes, including both versions, were supplied to RBI by BNP Dewas.
But in the documents supplied as RTI response by Bharatiya Reserve Bank Note Mudran (P) Ltd (BRBNML) and Currency Note Press in Nashik (CNP), there is no separate mention of old and new ₹500 notes. They just mention single numbers, 5,195.65 million and 1,662 million respectively. And, the Free Press Journal assumed these two are the numbers of new ₹500 notes printed by BRBNML and CNP Nashik in 2016-17.
That is a completely wrong assumption because it is already known that the presses were printing old design MG series ₹500 notes till October 2016, and printing of new notes started only after that. This means, the numbers for 2016-17 given by BRBNML and CNP Nashik include both old and new numbers.
If we add these two numbers with the number of old and new ₹500 notes from BNP Dewas, we find that it matches exactly with the total of old and new notes given in the RBI annual report. The total comes to be 9,272.65 million, while the total of both the ₹500 notes in RBI report for 2016-17 is 9,273 million. It can be seen RBI rounded the number after the decimal, and 9,272.65 million became 9,273 million, which is an exact match.
This means, there is no mismatch of ₹500 notes sent by the presses and received by RBI in 2016-17. As two of the three presses have not provided separate numbers for old and new ₹500 notes, it is not possible to compare the new notes only based on the available data. The comparison has to be done on the total number of notes, both old and new. And when the comparison is done on the total numbers, they match exactly.
As the report took the number of only new notes from the RBI report and then took the total number of old and new notes from BRBNMPL and CNP, it was a wrong comparison. That is why the number of notes supplied by the 3 printing presses is showing more than the number of notes received by RBI.
The report also claimed that the numbers for 2015-16 also do not match, as it claimed that the 210 million notes sent by CNP Nashik is not seen in the RBI report. It is not known how the report arrived at this conclusion, because RBI report does not contain press-wise detail of notes received, it only gives the total numbers.
In the year 2015-16, only old MG series notes were printed by the security printing presses and sent to RBI, as the demonetisation took place over eight months after the end of the year. In that year, BRBNML sent 2,915 million pieces, BNP sent 1,166 million, and CNP sent 210 million pieces, based on the reports provided by the three presses in response to the RTI query.
These numbers can be seen in the RBI report and the RTI responses of the three presses given above. If we add the number of ₹500 notes sent by the three presses, the result is 4,291 million. This result matches exactly with the RBI’s number for the year, 4,291 million pieces. Therefore, there is no mismatch for the year 2015-16 too as claimed by Free Press Journal. It can be seen that 210 million pieces of ₹500 notes sent by CNP Nashik is included in the RBI report for that year.
Wrong claim that RBI does not mention a printing press
The report also made a claim that the RBI report does not mention receiving any new ₹500 notes from Currency Note Press, Nashik. In fact, it claimed that 210 million pieces of ₹500 notes were missing because it is the number of notes sent by CNP, as the report claims that the RBI report does not include this number.
This is clearly the result of the wrong interpretation of the report. The RBI annual report mentions banknotes received from BRBNMPL and SPMCIL. Here BRBNMPL is Bharatiya Reserve Bank Note Mudran (P) Ltd, for which we already have data. But SPMCIL is Security Printing and Minting Corporation of India Limited, and the FPJ report somehow assumed that it means Bank Note Press in Dewas, and therefore it claimed that CNP is not mentioned.
But actually, the Security Printing and Minting Corporation of India Limited (SPMCIL) is a company under the Department of Economic Affairs of the Union Finance Ministry. And the two note printing presses from whom RTI responses were obtained, Currency Note Press in Nashik (CNP) and Bank Note Press in Dewas (BNP), come under SPMCIL. Therefore, the number mentioned in the RBI report includes numbers from both BNP and CNP, as it clearly marked as SPMCIL, and does not mention BNP or CNP.
It is notable that these two presses were earlier independent units, but the SPMCIL was set up in 2016, and several mints, security paper printing presses under the finance ministry, along with these two note printing presses were brought under it. On the other hand, BRBMNPL is a division of RBI. Therefore, the RBI report gives data from BRBMNPL and SPMCIL, not individual presses under SPMCIL.
The above screenshot of the website of SPMCIL shows various mints and printing presses under it. As the FPJ report assumed that SPMCIL means BNP, it assumed that the numbers for CNP are missing in the RBI data. But, had they simply added the numbers for all three presses for 2015-16, they would have found that it matches with the RBI data for that financial year.
Blatant misrepresentation
Apart from clearly wrong calculations and assumptions, the report also has one blatant misrepresentation of fact. It mentions that between April 2015 and December 2016, 375.45 million pieces of new ₹500 notes were printed by CNP Nashik, but RBI received only 345 million pieces.
Interestingly while in one place it claimed RBI does not include numbers from CNP Nashik, it also the report also claimed RBI report mentions 345 million pieces received from it. Both are wrong claims.
RBI annual report does not have a break up of notes received from BNP and CNP, and the number 345 million notes is not mentioned in the report. Surprisingly, the numbers are from the same source, the document supplied by CNP Nashik. It states that from April 2015 to December 2016, 375.45 million pieces of new ₹500 notes were printed, and 345 million of the same were supplied to RBI.
Therefore, both the numbers are from the press, one is production and the second is shipment to RBI. The second number is not from RBI as claimed by the report. It is obvious that the balance quantity, 30.45 million, was in stock at the end of the period at the press. But the report somehow assumed that it is a mismatch between notes sent by CNP and received by RBI.
Notably, although the report of the CNP states that 375.45 million pieces of new design ₹500 notes were printed from April 2015 to December 2016 by CNP, as the RTI query must have mentioned this period of 21 months, the actual printing must have taken place in the last two months of this period, November and December 2016.
Because, as mentioned above, demonetisation took place in November 2016, and up to October 2016, all ₹500 notes printed were old Mahatma Gandhi series notes which were demonetised. No new notes were printed in 2015-16, and from April 2016 to October 2016. Therefore, it can be seen that Currency Note Press in Nashik sent 345 million pieces of new ₹500 notes to RBI in 2016-17.
BNP Dewas sent 1,953 million pieces of new notes, CNP Nashik sent 345 million, therefore the balance of the 7,260 million received by RBI must have been sent by BRBNMPL, which would be 4,962 million pieces.
In conclusion, it is clear that Free Press Journal arrived at the wrong conclusion of missing new ₹500 notes because it compared data for only new ₹500 notes from RBI with the combination of both old and new ₹500 notes from two of the three printing presses. Along with that, it wrongly concluded that data for one press is not included in RBI data because it missed the fact that the concerned press is part of a company and the RBI has taken the total number for the company, and didn’t use separate numbers for individual presses.
OpIndia contacted Dharmesh Kakkar, the author of the Free Press Journal report, to ask if he has any comments to make on our conclusions. He said that he has no comments to offer, and their report was published based on claims made by RTI activist Manoranjan Santosh Roy, who obtained the reports from printing presses under RTI, and made the assumption that ₹500 notes were missing. However, as FPJ was given the documents by the RTI activist, it is clear that the portal didn’t examine the documents, and published Roy’s claims without any verification.
