New Delhi: The Reserve Bank of India (RBI) has supplied as much as Rs 5.50 lakh crore in fresh currency notes to the banking system so far after the government announced spiking 500 and 1,000 rupee notes on November 8, a top Finance Ministry official said.
In an interview with state broadcaster DD News aired on Saturday, Economic Affairs Secretary Shaktikanta Das said the situation of liquidity has largely improved in the country in the last five weeks.
“It has been five weeks since Prime Minister Narendra Modi made the announcement on November 8. Old currency notes of Rs 500 and Rs 1,000 started returning to banks and banking system from November 10.
“So far, nearly Rs 5.50 lakh crore currency has been infused fresh in the market. These are the latest figures,” Das said.
Citing RBI figures, the official said that “45-50 per cent notes in value terms (of the spiked currency) has been supplied in the market”.
However, the total amount of the spiked high value denomination notes of Rs 500 and Rs 1,000 in circulation on November 8 was 15.44 lakh crore, according to Finance Ministry figures given to the Rajya Sabha in response to a question.
If the Rs 5.5 lakh crore figure is counted, it means only 35.6 per cent of the spiked currency has been supplied so far.
Das said the government expected “that by December 31, we should be able to supply 6 lakh crore to 6.5 lakh crore in currency value in the market” which he emphasised meant that “over 50 per cent of currency will be in circulation (again) by the year end.
“It is the effort of the RBI and the government to infuse currency as soon as possible in the markets. We are trying our best to infuse (adequate) fresh currency notes.”
He said the government and the RBI, initially, gave “more importance” to printing Rs 2,000 currency notes to meet the pace of currency demand.
“But then we observed that people were not spending Rs 2,000 notes. It was not coming into the circulation. We then decided to increase the production of Rs 500 notes,” he said.
Das said 80-90 per cent of the production capacity of printing presses was “being dedicated to the printing of Rs 500 notes so that more 500 rupee notes come into the market in the next two-three weeks.”
He said the RBI has also supplied new 12,000 crore pieces of lower denomination notes of Rs 10, Rs 20, Rs 50 and Rs 100. “This is three times more than what is being supplied a year normally. This has been supplied in the last 30-35 days.”