Stock Of New Rs 500 And 2,000 Notes Was Kept Ready Before Demonetisation, Says RBI Governor

The Reserve Bank of India (RBI) had "kept ready" a reasonable stock of new Rs 500 and Rs 2,000 notes before the Prime Minister announced demonetisation on November 8.

No records of the discussion on demonetisation between the RBI and the government were maintained however, to ensure secrecy, RBI Governor Urjit Patel has told a Parliamentary Standing Committee on Finance.

The RBI did all it could to make the transition process to replace the invalid currency least disruptive, while keeping “secrecy in mind”, he said.

"Critical factors, such as installed capacity for printing and other resources viz availability/expected supply of inputs, like bank note paper, ink, logistics requirements etc were factored in and was shared and discussed with the government periodically," Patel said in a written reply.

The government had withdrawn old Rs 500 and 1,000 notes from November 9 last year with an aim to check black money, terror financing and counterfeit currency.

The move had taken about 86 percent of the currency out of circulation, leading to huge shortage of cash.

RBI informed the parliamentarians that as on November 8, there were 17,165 million pieces of Rs 500 and 6,858 pieces of Rs 1,000 notes in circulation aggregating Rs 15.44 lakh crore.

Patel also said discussions between the government and the central bank had started in early 2016 when Raghuram Rajan was the RBI Governor.

On the details of conversation between Rajan and the government on demonetisation, Patel said: "No such minutes of conversation with the previous RBI Governor are on record."