All measures being taken to ease citizens’ pain: RBI guv Urjit Patel on note ban

Mangalore Today News Network

New Delhi, Nov 27, 2016 : RBI governor Urjit Patel on Sunday said the central bank was taking necessary actions to “ease the genuine pain of citizens” in the aftermath of the demonetisation, his first statements in the matter since the government announced the move more than a fortnight ago.

“Liquidity in the banking system has been increased; the intent is to normalise things as soon as possible. The Reserve Bank of India (RBI) and government are getting printing presses to work at capacity to make the new notes available to meet demand,” the governor said in an interview with PTI.

Breaking his silence since Prime Minister Narendra Modi’s surprise announcement on November 8, Patel said the central bank was monitoring the situation on a daily basis.

“Currency is available and banks are working in a mission mode to take them to branches and ATMs.”

In the first week after 1,000 and 500 notes were made illegal tender, people thronged banks and ATMs to exchange their notes for valid money, in many cases waiting for hours before being able to get some cash.


The new Rs 500 and Rs 2,000 series were soon introduced, but cash circulation still remains a problem.

The government said the demonetisation decision is part of a crackdown on black money in the country. The measure is also aimed at countering fake Indian currency note rackets.

“People have asked why the new currency introduced was different in size and thickness from the old. This is because the new currency has been designed to make it hard to counterfeit. When you are going to make a change of this magnitude, you need to get the best standards in place,” Patel said, while he also urged people to start using cash substitutes like debit cards.

Patel further said the RBI has announced an incremental CRR (Cash Reserve Ratio) of 100 per cent “because of the large increase in deposits of banks on account of the return of Rs 1,000 and Rs 500 notes” and the decision would be reviewed immediately once the government issues adequate quantum of MSS (Market Stablisation Scheme) bonds which they have promised to do.

Courtesy: Hindustan Times