RBI to print more Rs 500 notes as banks face cash shortage
The currency presses in the country stared printing new Rs 500 notes as banks across the country continued to face cash shortage.
Reports say the denomination of Rs 500 notes continues to be in short supply as most the cash that banks are receiving are in notes of Rs 2,000.
Sources said the RBI owned presses in Mysuru, Karnataka and Salboni , West Bengal, are expected to print around 1 billion of the new Rs 500 notes by end of the year. The RBI’s presses have been printing only Rs 2,000 notes for the past two months.
In addition, two government-owned presses at Nashik and Devas are also working on augmenting the supply of Rs 500 notes.
“Supply to other banks will definitely improve. We are air-lifting 500-rupee notes. There will be some pressure initially but in the next few days it will ease,” a government source was quoted by Economic Times as saying.
Before demonetization announcement, more than 1,660 crore pieces of Rs 500 notes were in circulation, in the country representing around Rs 8.3 lakh crore of total currency.
“The presses at Mysuru and Salboni will now shift focus to Rs500 notes till the pain is fairly eased by December-end. However, it will not be until January when the system will be comfortable with enough currency notes,” an official was quoted by Livemint as saying.
Earlier, RBI accepted that there is a defect in the new Rs 500 after two variants of the new Rs 500 note surfaced and went viral on social media. The bank said the printing defect was due to the rush in the wake of demonetisation and that there is nothing to panic.
Reports quoted RBI spokesperson as saying, “It’s not a variant. Such a printing deficiency can happen once in a million. It is a valid legal tender and can be freely used in transactions. But if someone does not want to use it and return it to the RBI, that too can be done and we will give them full value.”