RBI Will Drastically Reduce Printing Of New Notes; Here’s The Reason Why..
It has been revealed that Reserve Bank of India will drastically reduce printing of new currency notes next year.
As per indications coming in from various source, it has been revealed that Reserve Bank of India or RBI will drastically reduce printing of new currency notes next year.
While 28 billion pieces of new, crisp currency notes were printed in 2016-17; only 21 billion pieces of currency would be printed in 2017-18 financial year.
This means a reduction of 33.33% in printing of new notes.
In fact, if we compare, then the printing of new notes has reached the lowest point in last 5 years. While 28 billion pieces of new currency notes were printed last fiscal year, the 5-year average has been 25 billion pieces of new notes.
What is the reason for this massive cut?
The Logic Behind Reducing New Notes
The primary reason is that RBI has no space to keep the new notes, as the existing vaults are over-loaded with demonetized currency which came back, due to demonetization drive.
As per official data, total currency in circulation as of October 13 was Rs 15.3 trillion, which is only 10% lower than last year. Hence, existing vaults and boxes available with RBI is stuffed with returned old currencies, and there is simply no space.
A senior executive with a private sector bank said,
“There is very little space in currency chests and RBI vaults to keep the new notes even after 50-60% of the demonetized notes have been transferred from the chests to RBI,”
When Will This Issue Resolve?
Consistent printing of new notes is important, because old currency gets spoiled.
As per incoming reports, RBI officials are using a ‘sophisticated system ‘ to count the demonetized currencies which came back to the banks. Once every single note has been counted, they will be destroyed, and space would be made available for new notes.
As of now, RBI has already counted 11.34 billion pieces of old Rs 500 and 5.25 billion pieces of old Rs 1000 currency notes.
Soumya Kanti Ghosh, group chief economic adviser at state-owned State Bank of India said,
“Reduction in indent is a conscious effort by RBI to keep within reasonable limits and optimising it with production capabilities.”
We will keep you updated, as receive more news on the printing of new currency by RBI.