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100 Rupaiyeh ki keemat tum kya jaano Ramesh Babu!
SBI Chief Arundhati Bhattacharya, like the rest of us, is certainly setting a lot of store by it. Till the new notes of Rs 500 and Rs 2,000 are more readily available, she advocates the use of the old Rs 100 notes to fill the gap.
But guess what? There just aren’t enough of those either.
But the question of how many banks actually complied with this directive can be answered with just one look at the serpentine queues and the disappointed, anxious faces outside ATMs all around the country.
Post demonetisation and the scrapping of the existing 500 and 1,000 rupee notes, the modest Rs 100 note has assumed great importance in order to ensure adequate liquidity and hold fort.
While the RBI on Sunday assured members of the public that enough cash in small denominations was available at the banks, it sounded ‘far fetched’ to Praveen Chakravarty, Senior Fellow at IDFC Institute, a Mumbai based think/do tank whose work focuses on financial sector legislation and political economy.
“There were roughly 16bn notes of Rs 100 in circulation before this whole exercise. which is the same number as Rs 500 notes. Which means, even if we were to forget the Rs 1,000 notes, if every Rs 500 was exchanged for five Rs 100 notes, we will need an additional 80bn notes of Rs 100. This will cost nearly Rs 15,000 crores and will take time. If anyone had thought that this can be easily implemented, he/she is living in cuckoo land,” says Chakravarty.
Echoing the sentiment, economist and professor, Ila Patnaik, says the RBI and other government officials appear to have massively overestimated the banks’ capacity to disburse money. She says it was the job of the RBI and other government officials to warn the PM of the logistical problems that they could encounter while employing such a massive demonetisation exercise.
Upasna Bharadwaj, economist at Kotak, says a shortage of Rs. 100 notes was an obvious folly of the whole demonetisation exercise. “Even with the Rs 2000 notes, one needs notes of smaller denomination to carry out day-to-day transactions,” she reminds.
“If it were not possible to have printed more Rs 100 notes, could the govt not have incentivised the small vendor to start switching to digital payments?” Bharadwaj wonders. This could have been taken care of in the last 6-9 months to get the digital economy going.
The voices are growing and amplifying.
100 rupye ki keemat ab to jaan jao RBI!
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