No 'less cash' two years post note ban
Cash in circulation and ATM withdrawals have only increased, RBI data shows
Thursday, November 8, marks the second anniversary of the demonetisation exercise. It was on the same day in 2016 that Prime Minister Narendra Modi announced that ?1,000 and ?500 currency notes would no longer be legal tender. These notes constituted over 86% of the currency in circulation, then.
One of the objectives of demonetisation was to move to a ‘less-cash’ society. However, two years down the line, it appears the objective has not been achieved.
According to Reserve Bank of India (RBI) data, currency in circulation rose to ?19.6 lakh crore as on October 26, 2018, a 9.5% growth from two years ago. The currency in circulation was ?17.9 lakh crore on November 4, 2016, the week before the note ban came into force.
With cash back in the system, ATM withdrawals have picked up. According to RBI data, cash withdrawals from ATMs grew 8% to ?2.75 lakh crore in August 2018 from ?2.54 lakh crore in October 2016. The October figure, which will be released in December, could well be higher, as withdrawals generally increase in the festival season. Cash withdrawals from ATMs fell sharply during the demonetisation exercise, hitting ?1.06 lakh crore in December 2016.
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