Rs 200 notes are just 2.1% of total currency; banks say makes no sense to change ATMs until they rise to 15%.
New Delhi: The Reserve Bank of India and the finance ministry want banks to recalibrate their ATM machines to dispense more Rs 200 notes. But most banks are reluctant saying Rs 200 notes constitute a minuscule share of the total currency in circulation.
As of March 2018, the Rs 200 notes formed only 2.1 per cent of the total currency basket, as per the RBI’s annual report. The RBI, which was focused on remonetisation almost throughout 2017-18, has now decided to boost the share of Rs 200 notes.
So far, over 70 per cent of the country’s 2.2 lakh ATMs are yet to be recalibrated to dispense Rs 200 notes. The calibrating of an ATM costs about Rs 1,500.
Bankers, however, argue that until the share of Rs 200 notes increases to about 15 per cent of the total, there was no logic in recalibrating ATMs.
“If you do not have enough number of Rs 200 notes, how will it help by recalibrating ATMs for their dispensation? So, first it has to be made adequately available,” a senior official with a Mumbai-based public sector bank told ThePrint.
For recalibration, it’s all in the boxes
ATMs in the country have four cassettes or boxes, which hold cash of different denominations. Before demonetisation, two cassettes in an ATM held notes of Rs 500 while the other two held Rs 100 and Rs 1,000 notes.
After the recalibration exercise following demonetisation, two of the cassettes now hold the new Rs 500 notes while the other two hold Rs 100 and Rs 2,000 notes. Banks will now have to undertake the exercise once again to ensure that notes of Rs 200 can be dispensed.
Share of Rs 500 notes up
According to RBI, the share of Rs 500 and Rs 2,000 notes in circulation has increased to 80.2 per cent as of March 2018, from the 72.7 per cent a year before that.
The share of Rs 2,000 notes has, however, dropped to 37.3 per cent from over 50 per cent in March 2017. In 2017-18, printing of Rs 2,000 notes too saw a dramatic drop. Only 151 million pieces of these notes were printed in the last one year while it was more than 3,500 million pieces in 2016-17.
Analysts point out that higher denomination currency notes such as the Rs 2,000 help people in illegally hoarding cash. “We need to ensure that the share of Rs 200 currency notes goes up while bringing down the share of the Rs 2,000 notes,” Soumya Kanti Ghosh, chief economic adviser of the State Bank of India group, said.