For some time, news was coming that 2,000 notes have stopped being received from Automated Teller Machines i.e. ATMs, due to which it is feared that 2,000 notes may be stopped. Now the government has issued an update regarding this and informed about this in the Parliament.
According to the government, no instructions have been given to banks to load or not load ATMs with Rs 2,000 notes and borrowers have their own choice to load the cash vending machines. Banks make their own assessment of the amount and denomination requirement for ATMs based on past usage, consumer needs, seasonal trends, etc.
Rapidly Growing Demand
According to the annual report of the Reserve Bank of India (RBI), the total value of banknotes in the denominations of Rs 500 and Rs 2,000 at the end of March 2017 was Rs 9.512 lakh crore, while the value reached Rs 27.057 lakh crore by the end of March 2022. Finance Minister Nirmala Sitharaman said in response to a question that the total amount of debt or liabilities of the central government as on March 31, 2023 is estimated to be around Rs 155.8 lakh crore, which is 57.3 percent of India’s total GDP.
Trying to Stabilize the Exchange Rate
According to the Finance Minister, the estimated external debt at the current exchange rate is Rs 7.03 lakh crore, which is 2.6 per cent of GDP. At the same time, the share of external debt is about 4.5 per cent of the total debt/liabilities of the central government and less than 3 per cent of GDP. As such, external debt is mostly financed by multilateral and bilateral agencies at concessional rates.
The RBI, in consultation with the government, has recently announced a number of measures to expand sources of foreign exchange funding to reduce exchange rate volatility and global spillovers.
Work Is Being Done to Increase Foreign Currency Funding
FCNR (B) and NRE deposits were exempted from the existing regulation on interest rates till October 31, 2022, to increase foreign currency funding. Under this, the commercial borrowing limit has been increased to USD 1.5 billion and the all-in-cost limit has been increased by 100 basis points in select cases till December 31, 2022. At the same time, to promote the growth of exports from India, RBI has made an additional arrangement for invoicing, payment and settlement of import-export.