Mumbai: The note-ban drive may leave around Rs 1,000 crore in currency printing cost with RBI and government as there is only Rs 1.15 trillion worth of new notes need to be printed to complete the remonenitisation process that may be achieved by mid-April, says a report.
The Reserve Bank need not print the entire amount of extinguished currency (Rs 15.55 trillion) because first already there was excess cash floating in the system before note-ban and secondly the pace of digitalisation has gone up leading less cash demand, SBI Research said in a report on Friday.
“Taking these into account, we believe RBI should only print Rs 1.15 trillion more from March 24 levels. And going by the average pace of printing, the process could be completed in the first fortnight of April.”
“This would mean, we’d become optimally remonetised by Baisakhi. Therefore around Rs 1.17 trillion worth of notes need not printed, leading a saving in printing cost in the range of Rs 500-1,000 crore,” it added.
“Despite recent RBI data showing a spike in digital payments, the current size of digital banking (payments through credit and debit cards through PoS terminals, prepaid payment instruments like mWallet, PPI cards etc and mobile banking) is around Rs 2.3 trillion only, and this has to increase from at least Rs 3.5 trillion to reach a balanced level of less cash economy,” the report said.
During the note ban period there was two-fold rise in debit card usage at PoS in volume terms and more than doubling in value terms during demonetization period and a 36 per cent rise in mobile banking transactions, according to RBI data.
During this period as as 5,476 PoS machines were installed daily, taking the total number of such machines to 5.04 lakh from under 2.5 lakh earlier.
One notable finding is that in value terms debit cards usage at PoS (Rs 490 billion) surpassed the credit cards usage (Rs 327 billion) first time in January primarily due to heavy usage of debit cards at PoS terminals.
The mobile banking transaction data also indicates total value through this model increasing by 36 per cent to Rs 1383 billion in January.