Soiled notes, which are usually destroyed by the Reserve Bank of India, are back in circulation to fight the short supply of currency notes.
According to banking sources, RBI has decided to put soiled notes of mainly Rs 100 back into the system to increase supply at a time when automated teller machines are running out of cash. “Keeping in view the huge demand of Rs. 100 notes, which are mainly dispensed by the automated teller machines, it has been decided to bring back a portion of the soiled notes in the banking system to address the supply constraint,” said a source adding that the printing presses might not have the capacity to meet the huge demand in a short time.
According to RBI data, during 2015-16, 16.4 billion pieces of soiled notes were disposed of as against a target of 17.1 billion pieces. In 2014-15, 15.1 billion pieces were destroyed. According to data available, 5,169 million pieces of 100 rupee denomination notes and 2,800 million pieces of 500 rupee notes were destroyed.
As on March 2016, 15.7 billion pieces of Rs.500 denomination notes were in circulation, constituting 17.4 per cent of the total pieces, while 6.3 billion pieces of Rs.1,000 notes were in circulation, which was 7 per cent of the total circulation.
