The finance ministry says supply of new currency notes will 'considerably improve' in next 2-3 weeks. Photograph: (AFP)
Finance Ministry on Wednesday exuded confidence that the supply of new currency notes would considerably improve in next 2-3 weeks even as it asked the RBI and banks to "countercheck" the data regarding the deposit of now-defunct currency notes to ensure there is no double counting.
The RBI has already pumped in Rs 5 lakh crore worth 500 and 2,000 rupee notes and by the month end about 50 per cent of the Rs 15 lakh crore worth demonetised currency would be injected into the system, economic affairs secretary Shaktikanta Das told reporters here.
"Finance Ministry, RBI and enforcement agencies are working in tandem so that situation eases out. Situation has considerably improved. And going forward, I would expect in next 2-3 weeks situation will considerably ease out with the supply of more new 500 rupee notes," he said, adding that condition would not "worsen" after December 30.
He said the government has stepped up printing of 500 rupee notes and as its circulation increases, people would also take out the 2,000 rupee notes they were hoarding so far.
More than 2 lakh ATMs have already been recalibrated against 2.20 lakh ATMs and it has come to the ministry's notice that some banks in order to ensure that they are in a position to service their own customers, prefer to give cash through their branches.
"We have advised banks that they should continue to replenish cash in ATMs and not to starve ATMs. We are monitoring it regularly," Das said.
As per RBI data, over Rs 12.44 lakh crore worth defunct 500 and 1000 rupee notes have been deposited till December 10.
"RBI has given a figure of Rs 12.5 lakh crore which has been received back. There are lot of areas where we feel there could be double counting. So we have identified those areas and we have requested RBI and banks to again double check.
"So a process of correction, checking, counter checking of the figure, due diligence is being done to see there is no double counting of figure.... We think there is scope for double counting and therefore the scope for verification of those figures are going on," Das said.
He said three times the total number of lower denomination notes -- 100, 50, 20 and 10 -- which RBI supplies in a year has been supplied over the last five weeks.
About Rs 1.60 lakh crore worth 100 rupee notes were in circulation before November 8 and more than Rs 80,000 crore worth of this notes have been supplied to the market over past five weeks.
The DEA Secretary further said that more number of 50, 20 and 10 rupee notes has also been circulated in the system.
"Roughly about almost 50 per cent of the notes which were in circulation would be supplied in the next 10-15 days," Das said, adding that seized notes are being put back to circulation as soon as possible.
Prime Minister Narendra Modi had on November 8 announced scrapping of old Rs 500 and Rs 1,000 notes, and replaced by new Rs 2,000 and Rs 500 notes. The demonetised notes accounted for 86 per cent of currency in circulation or Rs 15.4 lakh crore.
"More and more production lines have been diverted in printing 500 rupee notes because we have enough number of 2000 rupee notes that have been supplied and there is enough stock available. But now the printing of the 500 rupee notes have been significantly stepped up.
"It has been pushed into the market so that the supply of 2000 rupee notes becomes more mobile. So with increased supply of 500 rupee notes, the 2000 rupee notes which people were hoarding till now will come back to the system," Das said, adding notes are being airlifted to areas facing shortage.
He further said that the security features and design of the new notes were indigenously developed and hence the possibility of counterfeiting it is far far lower.
Das also promised to sort out issues faced by Nepal and Bhutan due to non-availability of 500 and 2,000 rupee notes.
"As far as Nepal is concerned we have already examined the report, so we will be taking some action, whatever action govt will take is under examination.
As far as Bhutan is concerned, the RBI has made necessary arrangements for supply of cash required by Bhutan authorities because Indian rupee is accepted in Bhutan. So the RBI has given necessary instructions to connected banks to give necessary cash required by Royal Monetary Authority of Bhutan," he said.
Das said the RBI has a particular plan of action with regard to currency supply. "With regard to remonetisation process, it would be as per requirement and also government has given a big push to digital transaction. There is very significant growth of digital transaction and therefore the requirement of cash will be measured and based on requirement the cash will be remonetised."
He said the CBDT is taking "surgical action" on data provided by the Financial Intelligence Unit (FIU) and the Suspicious Transaction Reports (STRs) filed by banks for detecting illegal accumulation of new currency.
"Further action is being taken by the tax department and it is not an aimless fishing expedition," Das said.
With regard to the impact of demonetisation on the sowing of the Rabi crop in winter, Das said the total sowing area so far was almost at par with last year and whatever shortfall had happened would be made good in the coming weeks.
More than 2 lakh ATMs have been recalibrated, 2.2 lakh to go