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Govt may withdraw all exemptions on use of old Rs 500, 1,000 notes

However, hoarding of new currency notes has arisen as a bigger challenge

Archis Mohan  |  New Delhi 

New currency notes of Rs 500 which is ready to float, at State Bank of India head office in New Delhi
New currency notes of Rs 500 which is ready to float, at State Bank of India head office in New Delhi.

The Narendra Modi government is struggling not only with the challenge of putting sufficient into circulation to meet the demand during December 1-7, but also of people hoarding the new notes. 

According to sources, the government is considering withdrawal of all exemptions on the use of Rs 500 and Rs 1,000 notes, so that new notes are pushed into circulation. 

Sources say there has been a steady improvement in the supply of and that the Reserve Bank of India (RBI) has planned for the rush and banks have made arrangements. 

According to sources, RBI’s focus has now shifted to printing the new Rs 500 to make them available in large numbers. Sources add that of the total Rs 100 in circulation, had kept 50% of these in reserves to tide over the demand. The entire process of printing a high-value currency note, including its security features, takes 21 days before it leaves the mints for circulation. 

Senior officials asserted putting money in ample quantities to meet the demand till December 7 would not be a problem.

However, hoarding of new has arisen as a bigger challenge. To resolve this, some in the government have even suggested that exemptions on old to be used in petrol pumps, to pay and public utility bills should be stopped forthwith. This proposal is under consideration, as it could make people start using new notes.

Govt may withdraw all exemptions on use of old Rs 500, 1,000 notes

However, hoarding of new currency notes has arisen as a bigger challenge

However, hoarding of new currency notes has arisen as a bigger challenge
The Narendra Modi government is struggling not only with the challenge of putting sufficient into circulation to meet the demand during December 1-7, but also of people hoarding the new notes. 

According to sources, the government is considering withdrawal of all exemptions on the use of Rs 500 and Rs 1,000 notes, so that new notes are pushed into circulation. 

Sources say there has been a steady improvement in the supply of and that the Reserve Bank of India (RBI) has planned for the rush and banks have made arrangements. 

According to sources, RBI’s focus has now shifted to printing the new Rs 500 to make them available in large numbers. Sources add that of the total Rs 100 in circulation, had kept 50% of these in reserves to tide over the demand. The entire process of printing a high-value currency note, including its security features, takes 21 days before it leaves the mints for circulation. 

Senior officials asserted putting money in ample quantities to meet the demand till December 7 would not be a problem.

However, hoarding of new has arisen as a bigger challenge. To resolve this, some in the government have even suggested that exemptions on old to be used in petrol pumps, to pay and public utility bills should be stopped forthwith. This proposal is under consideration, as it could make people start using new notes.
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Business Standard
177 22

Govt may withdraw all exemptions on use of old Rs 500, 1,000 notes

However, hoarding of new currency notes has arisen as a bigger challenge

The Narendra Modi government is struggling not only with the challenge of putting sufficient into circulation to meet the demand during December 1-7, but also of people hoarding the new notes. 

According to sources, the government is considering withdrawal of all exemptions on the use of Rs 500 and Rs 1,000 notes, so that new notes are pushed into circulation. 

Sources say there has been a steady improvement in the supply of and that the Reserve Bank of India (RBI) has planned for the rush and banks have made arrangements. 

According to sources, RBI’s focus has now shifted to printing the new Rs 500 to make them available in large numbers. Sources add that of the total Rs 100 in circulation, had kept 50% of these in reserves to tide over the demand. The entire process of printing a high-value currency note, including its security features, takes 21 days before it leaves the mints for circulation. 

Senior officials asserted putting money in ample quantities to meet the demand till December 7 would not be a problem.

However, hoarding of new has arisen as a bigger challenge. To resolve this, some in the government have even suggested that exemptions on old to be used in petrol pumps, to pay and public utility bills should be stopped forthwith. This proposal is under consideration, as it could make people start using new notes.

image
Business Standard
177 22

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