Demonetisation: Will replace at least 50 per cent worth of notes by Dec 30, says Shaktikanta Das

Status on curbs will be known only after that date.

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Economic Affairs Secretary Shaktikanta Das in New Delhi. (Source: PTI)

The finance ministry plans to replace at least 50 per cent worth of the withdrawn currency with new currency in the banking system by December 30, Department of Economic Affairs Secretary Shaktikanta Das said on Thursday. Whether the government will lift restrictions on cash withdrawals from ATMs and bank accounts will be known only after December 30, he said.

“Roughly whatever has been taken out … by the end of the month, about at least 50 per cent of the notes which were in circulation, which were actually in circulation, at least 50 per cent of the notes would have been supplied in another 10-15 days,” Das said in a press briefing.

When asked on lifting restrictions on cash withdrawals, the secretary said: “You see what the government will do on 31st December or after immediately 30th December; I will not be able to say now. You will know on 30th December obviously we have been communicating so we will continue to communicate.”

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He said the Reserve Bank of India has already supplied over Rs 5 lakh crore worth of currency to the markets so far and the government expects the situation to improve going forward with focus now shifting on supplying more of Rs 500 notes. New notes ceased by investigation agencies are also being put back into the system immediately, he said

“At this juncture, I will say that more than Rs 5 lakh crore of additional currency has been given to the markets …RBI has a particular plan to action with regard to currency supply, as per that plan of action the currency will be supplied,” Das said.

Notes of Rs 100 or lower denomination have been added significantly into the banking system to improve circulation. There were Rs 1.6 lakh crore worth of currency in denomination of Rs 100 notes as on November 8, which was increased by Rs 80,000 crore since then, Das said.

He said three times the total number of lower denomination notes — 100, 50, 20 and 10 — which RBI supplies in a year has been supplied over the last five weeks. The secretary said the government and RBI will also validate the actual amount of deposits of old notes of Rs 500 and Rs 1,000 as there may be some double counting. As per RBI data, over Rs 12.44 lakh crore worth defunct Rs 500 and Rs 1,000 notes have been deposited till December 10.

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“There are lots of areas where we feel there could be double counting. So we have identified those areas and we have requested RBI and banks to again double check. So a process of correction, checking, counter checking of the figure, due diligence is being done to see there is no double counting of figure … We think there is scope for double counting and therefore the scope for verification of those figures are going on,” he said.

Das said the new notes of Rs 500 and Rs 2,000 have indigenously designed with better security feature and far lower chances of being counterfeit. He said the government was also taking “surgical action” against people illegally hoarding new notes, with surveillance being stepped up by investigative agencies as well as the banks.

Action taken by agencies is based on specific inputs given the Financial Intelligence Unit (FIU), and it is not an ‘aimless fishing expedition’, the secretary stressed. “It’s a very pointed and focussed action, what you call a surgical action — if you can use that word — based on information. So action is continued,” he said.