Mumbai: The pain of chasing cash in currency notes is expected to last much longer than expected. The RBI on Wednesday had said that it printed 1,910 crore pieces of lower denomination notes like Rs 10 and Rs 20 between November 16 and December 5, which is more than they did in the last three years. It did not say how long it would take to print the equivalent of the notes immobilised, of over Rs 14,00,000 crore.
Dhananjay Sinha, head, institutional research, Emkay Global Financial Services Ltd, said on a rough calculation RBI printed 3.30 crore pieces since the time Dr Urjit Patel took over as RBI governor. Hence, RBI may have printed 3.30 crore pieces of new Rs 500 & Rs 2,000 denominated notes or roughly 150 per cent of our estimate of RBI’s monthly printing capacity. With more than Rs 12,50,000 crore coming into the banking system (higher than our assumption of Rs 10,50,000 crore) the replacement requirement for the demonetised notes could be higher than 1,600 crore notes (vs earlier estimation of 15.70 crore notes).
Hence the much longer wait than just a few months for the RBI to compensate for the organic demand and currency replacements arising from demonetisation. Former RBI deputy governor Dr K.C. Chakrabarty was quoted by MoneyLife as saying that one of the printing presses is “in a mess” and that it would take at least five to six months’ time before the situation stabilises and the RBI is able to supply all denomination notes.
He further pointed out that since printing currency notes is a high security job where even the top most people are checked it is not possible to hire people from outside so that presses can work in more shifts.