The finance ministry assesses that it might take more than two weeks from now, to be able to adequately address the shortage of bank notes in the country. The shortage had hit at a time when the nation was in a festive mood and the government has been pushing for a digitalisation of the economy.
“We have started the process of printing new notes. Looking at the time to be taken by additional inputs like paper and ink to arrive, we can safely assume that by the first week of May, we would start printing the additional banknotes,” said a high-ranking RBI official in Delhi
“Arrangements for quickly dispatching these notes to demand centres have also been made,” the RBI official said, after attending a meeting between finance ministry officials and RBI authorities, to understand the logistical arrangements planned by RBI to dispatch the new banknotes once they are printed.
According to RBI and finance ministry estimates, at present, there is a shortage of Rs 75,000 crore vis-a-vis demand for banknotes in the country. The RBI had earlier maintained that all its currency chests in the country have adequate reserves of bank notes.
However, according to government sources, there is an acute shortage of bank notes in Telengana, Andhra Pradesh, Tamil Nadu, Gujarat, Madhya Pradesh, Bihar and parts of Delhi. Subhash Chandra Garg, secretary, department of economic affairs, had earlier said that the government would step up printing of Rs 500 notes to meet this shortfall.
Presently, bank notes are being printed in India from four security presses run by the Security Printing and Minting Corporation of India Ltd at its Currency Note Press in Nashik, Maharashtra and Bank Note Press at Dewas, Madhya Pradesh. Two other currency printing facility in the country is run by the Bharatiya Reserve Bank Note Mudran Pvt Ltd, an RBI undertaking at their press in Mysore and Salboni, West Bengal.
Other than the special paper containing security features in banknotes, special inks and equipment are also needed to print currency notes. While some security paper used in Indian currencies are manufactured at a government facility in Hyderabad, most need to be imported, along with security inks, from either Europe or Japan.
Japanese printing press manufacturer Komori, one of the manufacturers of currency press used in India, also ruled out problems with machinery and equipment being used in India, for the current shortage of banknotes. India’s four currency printing facilities use press machinery supplied by Komori and German manufacturer Giesecke & Devrient (G&D).
“There are no problems with any of the printing machines. In fact, the ones being used in India are state-of-the-art,” said Hirofumi Hoshino, MD, Komori India. The company had supplied new currency printing machines to facilities in India post-demonetisation, but are bound by confidentiality clause from revealing the exact number of presses operating.
While some security features are provided in these printing machines, security ink, another critical component of note printing is sourced from Switzerland and Japan as India is yet to start manufacturing them.