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Cash Withdrawal Cap May Not Be Necessary From 1 January, Says Santosh Gangwar

"Inconvenience of limited withdrawal will lessen after 30 December."

29/12/2016 3:51 PM IST | Updated 29/12/2016 4:12 PM IST
Hindustan Times via Getty Images

NEW DELHI -- The cap on cash withdrawal may not be necessary from 1 January, as 250-300 million currency notes were being printed on a daily basis, Minister of State for Finance Santosh Gangwar has said.

"I have been told that 25-30 crore notes are being printed on a daily basis. Continuing with the withdrawal cap is not necessary from 1 January," Gangwar told CNBC TV18 in an interview on Thursday.

"Inconvenience of limited withdrawal will lessen after 30 December. Improvements can be seen in the transaction process in the last few days," he added.

The central government had demonetised ₹500 and ₹1,000 currency notes on 8 November, sending the whole nation into a tizzy. Long queues outside banks have been a daily occurrence since then because enough currency notes are not available with the banks.

The Minister said that sufficient quantities of new currency could not have been printed earlier as it would have leaked the news of demonetisation which was intended to be a surprise. This is particularly true for the new ₹500 notes, printing of which, presumably, started after 10 November.

"Could not print currency earlier as the news would have leaked," he said.

There are four currency printing presses -- one each in Nashik (Maharashtra), Dewas (Madhya Pradesh), Salboni (West Bengal) and Mysuru (Karnataka).

The first two are owned by the central government through the Security Printing and Minting Corporation of India Ltd. The other two -- in Salboni and Mysuru -- are part of the Bharatiya Reserve Bank Note Mudran Pvt. Ltd. (BRBNMPL), a wholly-owned subsidiary of the Reserve Bank of India (RBI).

If all three shifts run, the four presses would be able to print 40 billion notes a year, irrespective of the denomination.

The government had earlier said that it had no intention of printing new notes worth the entire demonetised currency i.e. ₹15.44 lakh crore.

The requirement of the cash will be measured and according to that it will be pushed into circulation, the Finance Ministry had said.

According to estimates the government would have put about 50 percent of ₹15.44 lakh crore in circulation by December-end.

Gangwar said that post-demonetisation the government wants to move towards a less-cash society and not completely cashless society.

"We are not talking about cashless but less-cash," he said.

On the government receiving flak for its decision of allowing only one-time deposits of amounts of over ₹5,000, Gangwar said that it was rolled back after receiving people's feedback.

"There's nothing wrong in rolling back some decisions. We are answerable primarily to the common man more than the opposition party. We have rolled back certain decisions after receiving feedback," he said.

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