RBI governor Urjit Patel RBI governor Urjit Patel

Breaking his silence on demonetisation, Reserve Bank of India governor Urjit Patel on Sunday insisted that necessary actions are being taken to “ease the genuine pain of citizens” who have been affected by the move, which has left many in the lurch and utter state of confusion. “RBI is taking all necessary actions to ‘ease the genuine pain of citizens’ who are honest and who have been hurt,” Patel told news agency PTI.

The RBI governor, who came under attack by the opposition for his silence over the raging issue, emphasised that liquidity in the banking system has increased and stressed that the intent of the central monitoring authority is to normalise things as soon as possible.

Urging people to start using cash substitutes like debit cards, Patel assured his countrymen that currency is available and added that “banks are working in a mission mode to take them to branches and ATMs.” According to him, usage of debit cards will make transactions cheaper and easier.

Patel further said that the RBI and government are working in unison in getting printing presses to work at capacity to make the new notes available to meet the increasing demand.

Patel also said the RBI has announced an incremental CRR (Cash Reserve Ratio) of 100 per cent “because of the large increase in deposits of banks on account of the return of Rs 1,000 and Rs 500 notes” and the decision would be reviewed immediately once the government issues adequate quantum of MSS (Market Stablisation Scheme) bonds which they have promised to do.

Patel said the situation arising out of the decision to withdraw Rs 500/1,000 notes is being monitored on a daily basis and the printing presses have started to rebalance the production of new notes towards Rs 100 and Rs 500 bills.

Giving details of the steps being taken by RBI, he said, “Both RBI and government have been getting the printing presses to work at capacity to get the new notes available to meet demand. “The RBI is interacting with the banks every day. They are telling us that the situation is gradually easing. The queues in branches and ATMs are shorter and the markets are starting to function, and there are no reported shortages of daily items of consumption.

“Also, about 40-50,000 people were deployed to refit the ATMs. Currency is available and banks are working in a mission mode to lift currency and take them to their branches and ATMs. The staff members of all banks have worked very hard, and we all owe them our gratitude,” Patel said.

“Having said that, it is important to regularly review the situation, and taking the required decisions to ease the genuine pain of citizens who are honest and who have been hurt. There are no precedents on this subject at this scale and we have to be reactive to the situation.

“People have asked why the new currency introduced was different in size and thickness from the old. This is because the new currency has been designed to make it hard to counterfeit. When you are going to make a change of this magnitude, you need to get the best standards in place,” Patel said.

(With inputs from PTI)

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