that’s the deadline by which old Rs 500 and Rs 1,000 notes can be deposited at banks. But here’s the question everyone’s asking — will withdrawal limits get lifted after that? Based on conversations that ET had with a wide range of bankers, the short answer is — maybe.
The consensus view is that there may be a modest relaxation but whether this brings relief to all the people braving queues in Mumbai, Delhi and elsewhere depends on how much more currency is pumped into the system, especially the new Rs 500 notes.
On the other hand, the government clearly wants to encourage the switch to a cashless economy, so keeping some curbs in place would make sense, bankers said. “The supply has not improved dramatically in the last days,” said a senior bank official.
“If someone faces a problem, I also feel the pain. I understand their problem but this is only for 50 days.”
At the press conference that followed the monetary policy announcement on Wednesday, the RBI said old currency worth Rs 11.5 lakh crore had been deposited and Rs 3.8 lakh crore of this had been replaced with new notes. That’s a difference of Rs 7.7 lakh crore, an amount that will take more than a month to replace, assuming people want to get all of that back in cash.
RBI Deputy Governor R Gandhi had said that the currency presses have been working overtime to supply notes. “We have given to the public 19 billion notes, equivalent to what we supplied in three full years,” he said.
In response to a query on when the restrictions would be lifted, Gandhi said, “We are monitoring the situation based on supplies and based on actual demand which is coming from the grassroots level… Exact date and everything that is difficult at this point in time, but every day we are reviewing it.” Senior RBI officials told ET that the supply of Rs 500 notes is expected to improve next week since the printing of the currency has started at RBI’s Mysore press as well.
“With this, we assume that the restriction will not go away completely but the withdrawal limits may be raised. However, the amount (of relaxation) will be decided in consultation with the finance ministry,” an official said.