Transcript of Statement made by Shri R. Gandhi, Deputy Governor on Demonetisation
There have been several questions about the decision to withdraw the legal tender status of the ₹ 1000 and the old series of ₹ 500 notes.
The motivations for the decision (Demonetisation) are to deal with the problem of high quality counterfeit notes in these denominations and unearth black money that may be held in cash. The Demonetisation decision has not been taken in haste but after detailed deliberations. There had to be a high level of secrecy surrounding this decision and the fact is that such a large country was indeed taken by surprise when the Demonetisation decision was announced. The Reserve Bank and the Central Government were conscious of certain immediate difficulties that the public at large could face and all efforts were made to minimise them and mitigate them. The problems of the common persons were at the top of the policy makers’ radar and all dispensations were calibrated to address them without at the same time jeopardising the achievement of the larger policy objectives.
The Reserve Bank and the Central Government run note presses are working to their full capacity and all efforts are being made to reach the notes to every part of the country. In fact during this period (from 10th November 2016 to 5th December 2016), the Reserve Bank has supplied to the public banknotes of various denominations worth ₹ 3.81 trillion.
As regards lower denomination notes of ₹ 100, ₹ 50, ₹ 20 and ₹ 10, the Reserve Bank, over its counters and through bank branches all over the country, has supplied 19.1 billion pieces of denominations in this period. (₹ 100 – 8.5 billion, ₹ 50 – 1.8 billion, ₹ 20 – 3.1 billion and ₹ 10 – 5.7 billion). This is more than what the Reserve Bank had supplied to the public in the whole of last three years.
We reiterate that there is adequate supply of notes and hoarding of notes helps nobody’s cause. We also strongly advocate the public to switch to digital payment modes given that there are several options, there are adequate safeguards and there is an increasing acceptability of this mode of payment by a large number of recipients.