Demonetisation: RBI shifts focus to lower value currency notes to deal with cash crunch

The government and RBI owned currency printing presses have now started printing more lower denomination notes in a bid to correct the earlier blunder of printing more Rs 2,000 notes, which worsened the cash crunch after the demonetisation of Rs 500 and Rs 1,000 notes on 8th November.

According to a reply from the the Reserve Bank of India to an RTI query, the central bank said the printing of Rs 500 notes is now in progress.

Security Printing and Minting Corporation of India Ltd (SPMCIL), which operates two presses, is at present printing only Rs 500 and lower denominations notes, the RBI said in a reply to the query by activist Anil Galgali. It also said the average production cost of Rs 500 note has not been calculated yet.

Reserve Bank of India (RBI). Reuters

Reserve Bank of India (RBI). Reuters

Galgali had asked for information on available old and new currency notes from the central bank. The queries were forwarded to SPMCIL and Bharatiya Reserve Bank Note Mudran Pvt Ltd under Section 6 (3) of RTI Act 2005. While SPMCIL comes under the finance ministry, the latter is under the RBI.

The query to SMPCIL was then forwarded by the company's public information officer K P Shrivastav to Bank Notes Press (BNP), Dewas, and Currency Note Press (CNP), Nashik.

The replies assume significance as the RBI has increased the withdrawal limit from ATMs to Rs 4,500 per card from 1 January from Rs 2,500 earlier. Despite the increase in withdrawal limit, customers had been able to withdraw Rs only 4,000 or Rs 2,000 at many ATMs due to no sufficient supply of Rs. 500 notes. However, the situation seems to be gradually changing now.

Reacting to the replies he got, Galgali said he is happy that finally the RBI has started focussing on printing lower denomination notes such as Rs 500, Rs 100, Rs 50, Rs 20 and Rs 10. However, he says he has not got all the details he sought. "The RBI keeps forwarding the RTI queries. Is that a tactics to deny the correct information? It is curious that the central bank has no details of the notes printing with itself and has to redirect the queries to printing presses," he said.

He expects to get more information on the details he sought in the coming days though he says he is unhappy with the delay in getting them. "It took 25 days for the central bank to give this little details," he said.

The RBI has already come under criticism for refusing to divulge crucial details related to demonetisation under RTI Act. Responding to a query filed by another activist Venkatesh Nayak, the RBI said it cannot disclose to the minutes of the crucial meetings of central board of directors on the issue of demonetisation citing section 8(1)(a) of the transparency law.

The section states that “Information, disclosure of which would prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the state, relation with foreign state or lead to incitement of an offence.”

In reply to another query, the RBI also refused to give any details about the time it will take to replenish the currency notes.

Former chief information commissioner and RTI activist Shailesh Gandhi had termed RBI's attitude "sheer arrogance". "What the RBI is doing by refusing to answer queries under RTI is denying citizens their fundamental rights," Gandhi had told Firstpost in an interview.

The details Galgali has sought through the RTI is important as the central bank is not giving periodical updates on the currency printing status. The last press release on the subject from the central bank was on 21 December, which said until 19 December it has issued a total of 22.6 billion pieces of notes of various denominations to banks. Of 22.6 billion pieces, 20.4 billion belonged to small denominations of Rs 10, Rs 20, Rs 50 and Rs 100 and 2.2 billion belonged to higher denominations of Rs 2,000 and Rs 500.

Updated Date: Jan 04, 2017 17:21 PM

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