The Modi government’s move to demonetise Rs 1,000 and issue new Rs 500 bank notes would leave that around Rs 15 lakh crore worthless, as per earlier estimates. People have been given 50 days to turn in their Rs 500 and Rs 1,000 notes with the banks to get new notes.
Replacing all Rs 500 and Rs 1,000 notes will be a massive task for the banks and the government. There are 16.5 billion notes of Rs 500 in the market. As far as Rs 1000 notes are concerned 6.7 billion notes have been printed and are in circulation in the market.
While the total number of bank notes in circulation rose by 40 per cent between 2011 and 2016, the increase in number of notes of Rs 500 denomination was 76 per cent. As for Rs 1,000 denomination notes were concerned there was an increase of 109 per cent during this period.
“In this period the Indian economy grew by 30 per cent. This means that there has been a very high increase in printing of high denomination of notes,” said economic affairs secretary Shaktikanta Das.
New Series bank notes of Rs 500 and Rs 2,000 denominations will be introduced for circulation from 10th November, 2016. Infusion of Rs 2,000 bank notes will be monitored and regulated by RBI. Introduction of new series of bank notes which will be distinctly different from the current ones in terms of look, design, size and colour has been planned.