70% Of Notes To Be Remonetised By February-End: SBI Research

At the Reserve Bank of India's current printing press capacity, 70 per cent of the notes will be remonetised and "normalcy will return most likely" by the end of February, according to a report by SBI Research, the economic research arm of State Bank of India. The report also noted, quoting Reserve Bank of India data, that Rs 7 lakh crore of new currency has been supplied till January 13, 2016, adding that "printing of new notes is going on at a pace keeping in mind the less cash future and not the past and we welcome this new normal".

Roughly 70 million pieces of notes of different denominations are being printed per day at the printing press. This translates into around 1.8 billion pieces per month, said the SBI Research report, released on Friday.

"It is highly unlikely that RBI has only printed Rs 500 notes in entirety" given the current printing press capacity, due to the printing capacity of "less than 2 billion pieces a month, it seems going by the data", it said.

"Hence, RBI has most likely also printed notes of varied smaller denominations as well as printing Rs 2000 notes, so as to optimise the printing capacity."

"If we go by this trend, we are still maintaining that 70% of the notes will be remonetized by Feb-end," the report said, adding, "Hence normalcy will return most likely by Feb-end."

The banking behemoth also welcomed the pace of printing of new currency notes. "To sum up, printing of new notes is going on at a pace keeping in mind the less cash future and not the past and we welcome this new normal. The future belongs to money as a medium of exchange and not as a store of value!"

SBI also estimated newly supplied currency by February-end to be worth Rs 10.2 lakh crore. It also projected 62-72 per cent of total new currency in circulation by the end of February, as percentage of extinguished currency.

Earlier this week, a parliamentary panel member quoted RBI Governor Urjit Patel as saying the central bank has injected Rs 9.2 lakh crore worth of new currency notes into the banking system to help replace the notes banned on November 8.

Mr Patel met the panel on finance to answer questions about the demonetisation move.

The government on November 8 last year announced demonetisation of Rs 500 and Rs 1,000 notes, or 86 per cent of the currency then in circulation, to flush out black money.

About Rs 15.4 lakh crore worth of the notes were removed from circulation.