Government spokesperson Frank Noronha, on late Tuesday evening, refuted The Quint’s report that printing of the new Rs 500 notes was temporarily halted at the Nashik and Dewas presses.
“The report is totally baseless and unfounded. There is no truth to it,” Noronha said.
The spokesperson, however, said he “wouldn’t know” whether or not the printing of the new Rs 500 notes – which is grossly insufficient at the Dewas and Nashik presses – would be done at the Mysuru press operated by the Bharatiya Reserve Bank Note Mudran (BRBNMPL), a wholly owned subsidiary of the Reserve Bank of India (RBI).
Earlier in the day, Minister of State for Finance Santosh Gangwar admitted that printing of additional Rs 500 notes, which were in dire shortage across the country, would commence at the Mysuru press where the new Rs 2,000 notes were being printed by employing three shifts of workers.
Gangwar said that the RBI was focusing all efforts to bridge the shortfall of the new Rs 500 notes.
“There is a shortfall of Rs 500 notes. But the RBI is making all efforts, and printing is on in full force. The focus is now on printing Rs 500 notes,” Gangwar told a TV news channel, just a few hours after The Quint published its report.
The said report, based on confirmation from two RBI sources, revealed that the Dewas and Nashik printing presses did not have the capacity to print more than 5 million pieces of the new Rs 500 notes. These notes of high denomination are in extreme short supply, creating a severe cash imbalance across all banks in the country.
This was confirmed on Tuesday night by former RBI Deputy Governor KC Chakrabarty who said that “neither the Dewas nor the Nashik printing press has the capacity to print more than what the government is claiming”.
This assumes importance in the context of Gangwar’s claim that the 15 million pieces of the new Rs 500 notes were being printed daily by the Dewas and Nashik presses. The Quint reported that the Nashik and Dewas presses had the capacity to print only 5 million pieces of the Rs 500 notes daily.
Gangwar said it takes about 25 days for one lot of notes to be printed but still anywhere between 20,000-35,000 notes are being printed daily. Gangwar, however, refused to divulge the exact number.
(As many as) 20,000-35,000 notes are being printed daily. I cannot tell you the exact figure. It takes 25 days for one lot of notes to be printed.Santosh Gangwar
Assuming that the printing presses are churning out 15 million pieces of the new Rs 500 notes per day, it would take three years before normalcy is restored. And even if the presses work at peak capacity, it would take at least seven months to meet the shortfall.
While the printing of the Rs 500 notes will commence at the Mysuru press, the switchover from the current printing of the Rs 2,000 to the Rs 500 notes will lead to a shutdown – and a realignment of technology, software and machinery.
It takes between 21 and 25 days to realign printing inputs before a new currency note is taken up for printing.