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Amid rising anger among people across India over exchanging the scrapped currency, Finance Minister Arun Jaitley today regretted hardships caused due to withdrawal of high denomination notes but advised the public to be patient as the move will have larger benefits for the economy in long term. He said it may take up to 3 weeks for all the 2 lakh cash vending ATMs to operate normally as each one has to be calibrated individually to dispense new sized notes of Rs 2000 and Rs 500 besides lower denomination currency of Rs 100.
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Assuring that RBI and banks have stacked up enough currency to replace the Rs 14 lakh crore worth of Rs 1000/500 notes that have been declared invalid, he said the government is constantly monitoring the situation as it is a “massive operation”.
As banks have been asked to remain open this weekend to cope with the rush, the Finance Ministry held a video-conference call with top RBI officials to assess the emerging situation and coordinate currency distribution across the country.
At a hurriedly called press conference, Jaitley urged people not to flock the banks to exchange the now-defunct banknotes, asking them to stagger it over the 50-day window provided by the government for the purpose. The briefing, second in three days, was called after anger and chaos over never-ending queues were witnessed at banks that struggled to exchange old notes and give out newer Rs 2000 notes and smaller denomination currency.
Hardly 40 per cent of the ATMs were operating in the country and they too ran out of cash within hours. The new Rs 500 note was available only in Delhi and Mumbai and RBI has already started releasing soiled Rs 100 notes to cope with the demand. “ATMs could not have been calibrated (before the announcement) because of secrecy issue. Thousands of people are involved in recalibration exercise (and) secrecy could not have been maintained. Recalibration takes at least 2-3 weeks,” he said.
Terming demonetisation as a massive operation, he said there will be inconvenience in the first few days “but the long term advantages of this are to the overall economy”. “It is a regret that people are being inconvenienced. Because a replacement of this magnitude will cause inconvenience as you have to go to the bank, you have to stand in a queue,” he said.
In the short run, he said, some “obvious” disruption will be caused in the short term. “But once the money is available both in the system and more so in the banking system, the advantages of that to the economy and businesses will be far more. The capacity of the banks with all this additional capital to lend and support businesses is going to be far higher.
“And therefore medium term and long term advantages to the economy as against this temporary inconvenience or disruption, are far too many,” he said.