Was a November 2 notification from the Reserve Bank of India (RBI) a harbinger of the demonetisation that followed within a week? With the benefit of hindsight, one can argue that there was a calibrated method in the sudden ban on high denomination currency notes announced by the Government.
The November 2 circular on ‘Dispensation of Rs.100 denomination bank notes through exclusive ATMs’ said:
“A review of steps taken by banks for installing ATMs (automated teller machines) dispensing lower denomination bank notes was conducted and found that very few banks had taken initiatives in setting up ATMs dispensing lower denomination notes, including Rs.100 denomination bank notes.”
“In keeping with the objectives of the Clean Note Policy and to ensure that the genuine requirement of members of the public for Rs.100 denomination bank notes are met, the banks should increase dispensation of Rs.100 bank notes through ATMs,” the RBI circular advised bank heads.
The RBI informed bank chiefs of the decision to conduct a pilot project wherein 10 per cent of the ATMs in the country would be calibrated to dispense Rs.100 bank notes exclusively. “You are, therefore, advised to configure/calibrate 10 per cent of your ATMs to facilitate this arrangement,” the circular went on to say.
“As the process involved in configuring the requisite number of machines is not complex, the banks are required to complete the exercise within 15 days.” Banks were to pick branches across a “relatively large number of centres/states” and report compliance.
