The circulation of currency in the country is expected to normalise by the end of February, with almost 70 percent of notes estimated to get remonetised by then, a State Bank of India (SBI) report has said.
“We are still maintaining that 70 percent of the notes will be remonetised by February-end,” said the report brought out by SBI Research on Friday.
With transactions at the fuel pumps amounting to Rs 4.5 trillion on an annualised basis, even a 20 percent shift to digital would mean a saving of Rs 1 trillion, the report said.
Hence normalcy will return most likely by the end of February, it said.
As per the latest RBI data on currency in circulation, the newly-supplied currency till January 13 was around Rs 7 trillion, implying that roughly 70 million pieces of notes of different denominations are being printed per day.
At that rate, it would translate to the printing of around 1.8 billion pieces a month by the currency printing presses, it said.
Till December 19, 2016, the RBI had said that around Rs 5.9 trillion notes were remonetised. Hence, during the intervening period of December 19 and January 13, about 1 trillion worth of notes have been printed.
The report also said that given the current printing press capacity, it is highly unlikely that the RBI has only printed Rs 500 banknotes in entirety.
This would mean around 2.2 billion pieces of Rs 500 notes worth Rs 1.1 trillion, an unlikely event since the printing capacity is less than two billion pieces in a month, it seems going by the data.
As as result, the monetary authority has most likely also printed notes of varied smaller denominations as well as Rs 2,000 bills to optimise the printing capacity, the report said.
“Printing of new notes is going on at a pace keeping in mind the less-cash future and not the past, and we welcome this new normal. The future belongs to money as a medium of exchange and not as a store of value,” it added.
The demonetisation of Rs 500 and Rs 1000 notes on November 9 had rendered 86 percent of all currency defunct, leading to a nation-wide cash crunch.
With agency inputsBack to latest news