The exemptions given to certain transactions where payments have been allowed using the old currencies may be reviewed before December 15 as these measures are seen as having created hindrances in the new currency notes coming into circulation through the banking channels, government sources said.
On November 24, the exemptions for acceptance of Rs 500 and Rs 1,000 notes had been extended till December 15 in certain transactions. However, the government has assessed that many such exemptions, in fact, blocked new currencies from reaching to the public. “Wherever old currencies are allowed, some are using them just to change the old currencies into new. For example, the new currencies from the customers in petrol pumps do not reach the bank. Instead they go to those who want to convert,” pointed out a source in the government.
“At one point you will have to stop this ensure smooth circulation of the legally tendered currencies. There is a suggestion that all exemptions should be stopped. Because an average citizen is not getting the new currencies,” the source said.
The government sources also said adequate arrangements have been made to face the pay day and the Reserve Bank is fully prepared for it. “From today (Wednesday) evening there will be excess release of cash for five-six days,” the source said.
Explaining the measures, the source said the RBI has certain level of stock already and printing has been happening every day. “It releases a particular quantum and identifies a figure. They will keep releasing the figure every day till December 30,” he said. The government-owned presses at Nashik and Dewas have been printing only Rs 500 notes and the two presses of the Bharatiya Reserve Bank Note Mudran Pvt Ltd (BRBNMPL), a subsidiary of RBI, in Mysuru (Karnataka) and Salboni (West Bengal) print Rs 2,000 and Rs 500. “They are conscious that people will withdraw more during pay day time. So before November 30, they have tightened the release and would release more in the coming days,” he said.
The source added that the quantum of the currencies would not be an issue but the “tendency to hold legally tenderable currency” is not good. That’s the reason behind the suggestion that all exemptions should be stopped before the given time, he explained.