 "Currency in circulation shrinks: RBI")
Following the central government’s decision to demonetise all existing Rs 500 and Rs 1,000 notes, the currency in circulation shrank by 50 basis points in the week ended November 11, 2016.
According to the Reserve Bank of India (RBI)’s data on reserve money, the currency in circulation during the week under review declined by Rs 9,700 crore to Rs 17,87,700 crore, compared to the previous week.
In the week ended November 4, the currency in circulation had grown by Rs 20,100 crore (1.1%) to Rs 17,97,400 crore.
In the week ended October 28, the stock of currency in circulation had risen by Rs 18,200 crore to Rs 17,87,700 crore, according to the RBI.
On November 8, the Centre had announced the demonetisation move. Holders of old Rs 500 and Rs 1,000 notes were asked to deposit them in their bank accounts or exchange them at bank counters before December 30.
With the currency in circulation shrinking, small businesses such as roadside restaurants, vegetable vendors and grocery stores that use cash as a mode of transaction, have been hit.
Daily labourers, too, were rendered jobless as construction and other activities came to a standstill in view of cement, sand and other supplies not coming in.
Truckers were reportedly stranded on highways as drivers ran out of valid currency notes, affecting the movement of goods in several parts of the country.
Vegetable and fruit wholesale markets, as well as foodgrain mandis in many parts, also reported very low business due to a shortage of cash.
Even big hotels and malls reported a drop in footfall as out-of-cash public decided to skip them.
Meanwhile, to stop repeat money exchangers thronging banks with invalid currency notes, banks have started applying indelible ink mark on the right-hand index finger of customers in the select metro cities.
State Bank of India (SBI) and a few other banks in Delhi have started using indelible ink. According to a government statement, 11 branches of SBI are using the method to weed out customers queueing up again and again to exchange invalid currency notes.
