The government’s remonetisation exercise is expected to be completed by the middle of April after months of cash crunch since November 8 following the scrapping of old bank notes of Rs 500 and Rs 1000, a State Bank of India report has said.
Earlier, experts said that about Rs 2-2.5 lakh crore would not come back into the system. However, despite the fact that almost the entire amount has been deposited back into the system, the central bank would be required to print less currency notes as a sizeable population has moved towards using less cash.
“Hence around Rs 1.17 trillion worth of notes need not printed,” Soumya Kanti Ghosh, chief economic advisor SBI Group said.
“We are facing no cash shortage and the ATMs and bank branches are working well after the restrictions have been removed ... there have been no complaints,” said a senior executive of a private sector bank.
The RBI has already removed all restrictions on cash withdrawals either from the ATMs or bank branches. Sources said that the cash supply for ATMs has become normal, though a large part of transaction has moved to the digital platform.
There were 17,165 million pieces of Rs 500 notes and 6,858 million pieces of Rs 1,000 notes in circulation on November 8, 2016, the day Prime Minister Narendra Modi made the demonetisation announcement.
The government, which is also trying to move towards a “less cash” economy, announced mega cash awards – Lucky Grahak Yojana and Digi Dhan Vyapar – for both consumers as and merchants adopting digital payment modes. These schemes, which have started from Christmas last year, will cover transactions between Rs 50 and Rs 3000. Niti While the first draw to decide on the winners’ names was announced on December 25, the mega draw will be on April 14 – the birth anniversary of BR Ambedkar.
The total amount of high denomination currency circulating in the system was estimated at Rs 15.44 lakh crore of which Rs 8.58 lakh crore was in old Rs 500 notes and Rs 6.86 lakh crore in Rs 1,000 when these notes were banned.