In an attempt to end the ongoing cash crunch, as much as 70% of the notes will be restored in value as legal tender i.e., get remonetized by February end, according to an SBI report quoted in The Indian Express.

The report stated, "As per the latest RBI data on currency in circulation, newly supplied currency till Jan 13 is around Rs 7 lakh crores. This means that roughly 70 million pieces of notes of different denominations are being printed per day at the printing press. This translates into around 1.8 billion pieces per month by the printing press."

On November 8, Prime Minister Narendra Modi announced the demonetization of Rs 500 and Rs 1000 notes as legal tender. In an attempt to curb black money and move to economy to a cashless one, he announced December 31 as the deadline to deposit and exchange the old notes. Since the announcement, people have shifted their modus operandi from cash in hand to digital transactions.

“Printing of new notes is going on at a pace keeping in mind the less cash future and not the past and we welcome this new normal. The future belongs to money as a medium of exchange and not as a store of value,” said the report.

The report further stated that with petrol pump transactions amounting to Rs 4.5 lakh crore on an annualised basis, a 20% shift to digital would mean saving Rs 1 lakh crore. Hence normalcy will return most likely by February end. This saving would come in account of the 0.75% discount given on payments at petrol pumps using digital payments.

The report mentioned that according to the apex bank, till December 19, it had remonetised around Rs 5.9 lakh crore of notes and between the period from December 19 to January 13, around Rs 1 lakh crore value of notes were printed. The report stated, "Given the current printing press capacity, it is thus highly unlikely that the RBI has only printed Rs 500 rupee notes in entirety,"

This meant that around 2.2 billion notes in 500 rupee denomination would amount to Rs 1.1 lakh crore, which is unlikely since the printing capacity is less than 2 billion notes in a month. Hence it can be inferred that the RBI has most likely also printed notes of varied small denominations along with the printing of Rs 2000 notes so as to optimise the printing capacity.

SBI had said in its report, “If we assume that the RBI continues to print as it is doing as of now, then by January-end, only about 67% of the currency should get replaced (vis-à-vis earlier estimate at 75%).” By February, at this rate, the RBI could thus print as much as 89% of the total currency, it had said.

However, SBI then said if the apex bank decides to shift its printing more towards smaller denomination, this number could be close to 80%. It said things will be closer to normal by February-end in contrary to predictions of the currency swap crisis lasting longer.