Government today said the RBI monitors currency requirement on a regular basis and accordingly places order for printing.
New Delhi: Amid ongoing cash crunch following the demonetisation of old Rs 500 and Rs 1000 notes, government today said the Reserve Bank monitors the currency requirement on a regular basis and accordingly places order for printing.
Replying to questions in Lok Sabha, Minister of State for Finance Arjun Ram Meghwal said the new series of bank notes have been introduced with effect from November 10 after the cancellation of legal tender character of the old high denomination notes.
These new series bank notes are distinctly different from the old ones in terms of look, design, size and colour, he said in a written reply. "The RBI monitors the requirement of notes on a regular basis and places the indent on the printing presses accordingly," the minister said.
In another written reply, Meghwal said it is a prevalent practice to change design of notes from time to time and/or introduce/withdraw denominations of banknotes. The previous highest denomination of Rs 1000 was introduced in 2000.
"Due to persistent moderate to high inflation since then, the value of the same has been progressively eroded in Purchasing Power Parity (PPP) terms. Simultaneously, disposable income levels and GDP also continued to grow.
"This factor along with rising requirement for banknotes was the reason for introduction of banknote of Rs 2000 denomination...," he said. As on November 8, the day on which demonetisation was announced, there were 17,165 million pieces of Rs 500 notes and 6,858 million pieces of Rs 1000 notes in circulation.
Till November 27, worth of old banknotes returned to the banking system was about Rs 8.45 lakh crore and withdrawal by the public was about Rs 2.16 lakh crore. "Arrangements have been made keeping under consideration stock position, augmenting production of new series of banknotes, expediting supplies to all the currency chests, including air remittances from the press," Meghwal said.