Union Finance Minister Arun Jaitley on Saturday appealed to the people to bear with the inconvenience for a few days as replacement of the demonetised Rs 500 and Rs 1,000 notes is a massive operation that can not be achieved overnight.
The Finance Minister said India as a country should move towards plastic currency and use the electronic mode for more and more transactions.
At a hurriedly called press conference, Jaitley urged people not to flock the banks to exchange the now-defunct banknotes, asking them to stagger it over the 50-day window provided by the government for the objective.
Lakhs of anxious people are making a beeline to banks, ATMs and post offices to exchange their old Rs 500 and Rs 1,000 notes. The government is also looking into sudden "propping up" of money into zero-balance Jan Dhan accounts, after an unprecedented Rs 2 lakh crore of cash flooded the banking system within just two days of demonetisation of high value currency.
The minister urged people to accept the currency available at the banks rather than insist on smaller denominations. "Prior calibration would have given the whole game away", said Mr Jaitley, even as wilting banks and ATMs battled winding queues, scuffles and minor stampedes for a third straight day. Thousands of people are involved in recalibration exercise (and) secrecy could not have been maintained.
Though initially people face inconvenience, in the longer run, the demonetisation brings advantages to the economy, he said. "Some people have a problem with this attempt of cleaning up the political system", he told reporters here. "We are unable to do any job as we stand in queues in front of ATMs", said a labourer from Assam. In the short run, he said, some "obvious" disruption will be caused in the short term.
"And therefore, medium term and long term advantages to the economy as against this temporary inconvenience or disruption, are far too many", he said.
The Reserve Bank of India had yesterday said that currency printing presses are running at "full capacity" to sustain demand for new notes.
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Jaitley was asked why the Centre made a decision to issue Rs 2000 currency notes despite Swami Ramdev's demand for demonetising high-value currency notes. "The RBI and banks are in readiness..."
RBI has been advised by the government to set up a special cell to monitor the receipt of fake currency notes and inform such instances to the Economic Offences Wing of the state police, enforcement agencies of the Central Government and also to the Ministry of Finance.
In some parts of the country banks would remain closed on Monday on account of Guru Nanak birthday. These are currency replacement deposit, withdrawal, exchange, ATM withdrawal and deposit in machines. The receipt of counterfeits currency notes is being monitored closely.
To overcome cash-flow problems people are facing, the government allowed the use of old banknotes to pay court fees and utility bills until November 14.
In this time, he said, the SBI received deposits worth Rs 47,868 crore.
He said SBI's deposit is around 20 per cent of the total deposits in all the banks in the country.
The Centre has already asked all states to ensure proper security in all banks, ATMs and vehicles transporting cash in the wake of demonetisation of Rs 500 and Rs 1000 notes. We knew at the outset that the replacement of this much currency can not happen overnight.