Note ban will not affect RBI’s balance sheet: Urjit Patel
Patel reiterated that the note ban has not been implemented in haste. �The decision was taken after detailed deliberations, � he said.
Dispelling fears over the impact of noteban on Reserve Bank of India, RBI Governor Urjit Patel on Wednesday said, it will not have any automatic impact on RBI’s balance sheet.
“Actually, the withdrawal of legal tender characteristics status does not extinguish any of RBI’s balance sheet. Therefore, there is no implication on the balance sheet as of now. The question of a special dividend automatically does not arise as of now. Not just by the withdrawal of legal tender character.” Patel said.
Patel reiterated that the note ban has not been implemented in haste. “The decision was taken after detailed deliberations, ” he added.
RBI claimed it has ensured mechanism to ensure free flow of money in the country.
“The consequences that have emanated from the note ban were taken on board. That is why the planning, the process and implementation is what it was, keeping in mind high secrecy had to be maintained. The RBI and the government were conscious of certain immediate difficulties for the public at large and all efforts were made to mitigate them,” Patel further said.
In a recent statement, RBI stated, “As of December 6, nearly Rs 11.5 trillion or 80 per cent of the banned Rs 14.13 trillion of the currency has come back into the system.”
Experts have expressed fears that up to 20 per cent of the banned notes are not going to get back into economy, which would cause a balance sheet write-back of around Rs 3 trillion by the RBI.
However, Patel reiterated issues of common man are at “the top of the RBI radar” and the Central Bank has taken all necessary steps to ensure “that period for disruption is minimal while we recalibrate our note supply to the denomination that were not withdrawn in terms of legal tender character”.
RBI Deputy Governor R Gandhi said between November 10 and December 5, the bank has supplied banknotes to the tune of about Rs 4 lakh crore. “As regards lower denomination notes, RBI through its counters and bank branches have supplied 19.1 billion pieces in this period which is more than what RBI had supplied to the public in whole of last three years,” Gandhi added.