New Delhi, Nov 26, 2016: At a time when the entire country is fighting from money crunch caused by the scrapping of Rs 500 and Rs 1000 notes, people are receiving more of the pink Rs 2,000 bills and less of the dollar-lookalike Rs 500 bills from the ATMs.
Is this crisis are the result of clashes between central government and RBI. Here is what the RBI official said about the problem of flooding of 2000 notes and a scarcity of 500 notes.
Reserve Bank of India (RBI) circles in an answer said that Rs 2,000 notes are printed in the press run by the RBI at Mysore while Rs 500 notes are flowing out of government-owned note printing presses located in Nashik (Maharashtra) and Devas in Madhya Pradesh. (The fourth printing press in Salboni, West Bengal, and controlled by RBI, predominantly prints Rs 100 notes.)
RBI officials, who are angry and upset about an extensively shared perception that the central bank has been criticised by the government’s administration of the demonetisation move, told Economic Times that they “have no control over the supply of Rs 500 notes”. “Why should we be blamed? The government is taking all the decisions.
We are simply coming out with notifications after statements by finance ministry officials,” said a RBI old-timer requesting anonymity. The poor supply is an outcome of the government grossly misjudging the transactional importance of cash and overemphasising on the exchange requirement.
Furthermore, the printing of Rs 2,000 rupee notes started well before the new Rs 500 notes came out of the government press. As per RBI data, there were around 9,026 crore pieces of currency in circulation before demonetisation with Rs 500 and Rs 1,000 notes accounting for a quarter of this.
Senior RBI officials also said that the central bank’s printing facilities went on full steam in printing notes of the higher denomination on the hope that the process of replacing invalid notes would be faster as fewer notes have to be given out by banks and RBI offices in exchange for the same number of old, legalised notes.
However, there is no answer came from the government side on the problem from which the whole country is facing.