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Andy Mukherjee

No $45 Billion Behind India's Dry ATMs

It would be suicidal to generate funds for a bank recapitalization by not continuing to count outstanding notes as a liability.

India's radical move to outlaw 86 percent of its currency in circulation is one of those bold economic experiments that thankfully don't occur too often. But because they're rare, the chaos that follows such events becomes a breeding ground for urban legends.

The demonetization of India's existing stock of 500 and 1,000 rupee notes has spawned a number of such apocryphal tales, one of which is a $45 billion bonanza for the government that can be used to recapitalize the country's broken banking system, which needs roughly $90 billion to become whole again.