The Reserve Bank of India (RBI) need not print the entire amount of high-value currency notes extinguished by the Centre’s demonetisation move last year as firstly there was excess cash floating in the system prior to November 8 and secondly because a sizeable population has pared their usage of cash following the push for digital payments, the State Bank of India’s Group Chief Economic Adviser Soumya Kanti Ghosh wrote in a report.
“RBI should only print ₹1.15 trillion [lakh crore] more from March 24 levels,” Mr. Ghosh wrote. “And, going by the average pace of printing, the process could be completed by the first fortnight of April.” Hence, about ₹1.17 lakh crore worth of notes need not be printed, reducing the cost of printing by about ₹500 crore to ₹1,000 crore.
The report estimated the excess cash float at a minimum of ₹2.5 lakh crore before November 8.
Interestingly, according to the report, the debit card usage (₹490 billion) at PoS (point-of-sale) terminals in value terms had surpassed credit card usage (₹327 billion) for the first time in January this year . “The mobile banking transaction data also indicates total value through mobile banking increasing by 36% to 1,383 billion rupees in January 2017 compared to October, 2016,’’ it said. Significantly enough, banks had been able to set up 5.04 lakh PoS machines in just three months - from November 2016 to January 2017- at a pace of 5,476 PoS machines a day.
