Normal banking operations should resume by the end of the month, say top government sources, with the printing of Rs. 2,000 notes almost over and the recalibration of all the two lakh-odd ATMs in the country expected to be done by then, easing the cash crunch.
The government, the sources said, is contemplating doing away completely with the exchange of the 500 and 1,000 rupee notes banned last week and allowing only bank deposits for these once banks are operating regularly again and the recalibrated ATMs start dispensing the new 2,000 rupees notes.
It has already scaled down the amount that a person can exchange for new notes from 4,500 to 2,000 rupees. Only a one-time exchange is allowed across the counter of a bank or post office, but the old notes can be deposited in banks till December 30.
Since November 8, when Prime Minister Narendra Modi made a sudden announcement abolishing 500 and 1,000 rupees notes, people have waited for hours in long queues at banks, mostly to exchange the banned notes for new currency. Regular banking operations have been hit.
The government, criticised for the inconvenience caused to people, has rejected the allegation of opposition parties that the demonetisation move was ill-planned. It has said that the announcement had to be sudden to ensure that people with black or untaxed money were caught off guard.
The decision to print Rs. 2,000 notes first and not Rs. 500 or Rs. 1,000 notes to replace the currency that was abolished was taken because this was the quickest way to replace the money with the whole operation being kept secret, sources said.
The government has also launched new 500 rupees notes.
The banned notes made up 86 per cent of the money in circulation and the banking system has been under tremendous pressure to replace it. The Reserve Bank of India reiterated on Thursday that there is sufficient supply of notes “consequent upon increased production which started nearly two months ago”.
It asked the people not to panic or hoard currency notes.