The central bank said that “the shortage may be felt in some pockets largely due to logistical issues of replenishing ATMs (Automated Teller Machines) frequently and the recalibration of ATMs being still underway. RBI is closely monitoring both these aspects.”
Taking precaution measures, the Reserve Bank said it is also taking steps to move currency to areas which are witnessing unusually large cash withdrawals.
Earlier in the day, finance minister Arun Jaitley echoed similar views and said that there is “more than adequate” currency in circulation.
Addressing the media, Department of Economic Affairs (DEA) secretary, Subhash Chandra Garg said that steps are being taken to raise the Rs 500 note production by five times.
Currently, the currency in stock is about Rs 2 lakh crore and the reserves are adequate to meet any unusual spurt in demand, he added.
Unusual spurt in currency demand in states like Uttar Pradesh, Madhya Pradesh, Andhra Pradesh as well as poll-bound Karnataka led to dry ATMs in several parts of the country, sending the government scrambling to make contingency plans to cover the deficit.
The government said it suspects that Rs 2,000 notes were being hoarded and plans to increase 5-fold the printing of Rs 500 notes. Within a month, it said, Rs 70,000-75,000 crore will be printed.
Minister of State for finance Shiv Pratap Shukla said the government has formed a committee to address the problem of currency shortage in certain states and the issue would be resolved in next 2-3 days.
“The Government of India with the Reserve Bank of India have taken all steps to meet this unusual demand. We had adequate reserves of currency notes which have been used to meet fully the extraordinary demand generated so far,” the finance ministry statement said.
“We continue to have in stock adequate currency notes of all denominations, including of Rs 500, Rs 200 and Rs 100 to meet any demand,” it added.
According to the Reserve Bank data, currency in circulation as on April 6 was Rs 18.17 lakh crore, which is close to the number at the time of demonetisation. Since the amount of currency put out by RBI and government printing presses is adequate for normal transactions, bankers believe there is hoarding of the Rs 2,000 notes. Nearly Rs 5 lakh crore worth of Rs 2,000 notes were printed after demonetisation.