As the government has repeatedly claimed that banks have sufficient currency notes, a recent report by a global financial services major says otherwise.
The Reserve Bank of India (RBI) could so far bring in circulation new currency notes worth only Rs 1.5 lakh crore since the announcement of demonetisation, says Credit Suisse in its latest research report on November 25.
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And a large share of this amount, if the report is to be believed, has been in the form of Rs 2,000 notes, which are ¡°not ideal for transaction¡±.?
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It could be ¡°several months¡± before the RBI is able to plug the Rs 14.18 lakh crore hole left behind by the withdrawal of the 2,203 crore pieces of Rs 500 and Rs 1,000 notes, writes The Indian Express quoting the estimates.
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¡°To meet the new currency demand, industry estimates indicate that the RBI has already been able to print 150 crore. However, these notes being high value and with remaining currency <15 percent of the total currency, they are unable to provide enough liquidity to transact,¡± says the report says.
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There is a need for 1,000-2,000 crore pieces of the new Rs 500 notes to get back to the ¡°normal transactional volumes¡±, the report adds.
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Considering trends in the past week says the Credit Suisse report, ¡°it appears that the RBI has been able to print only 4-5 crore pieces/day of the new Rs 500¡±.?
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It said that until last weekend about 40 crore?of these were issued to the banks, which translated to only Rs 20,000 crore in value.
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The report is corroborated by ICICI Securities Primary Dealership data, which, says that 64 percent of the value of older high denomination notes would be in circulation by January 2017.
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The cash deficit may go on for longer in view of the 100 percent capacity, says the daily¡¯s report on the basis of ICICI Securities estimates, normalcy might not be restored until March 2017.