The Reserve Bank of India needs to print an additional Rs 1.15 lakh crore-worth of currency notes to reach a level of optimal remonetisation, with Rs 13.12 lakh crore already in circulation as on March 24, the State Bank of India said on Friday.
"We believe Reserve Bank of India (RBI) should only print Rs 1.15 lakh crore more from March 24 levels. And going by the average pace of printing, the process could be completed in the first fortnight of April," Soumya Kanti Ghosh, Chief Economic Adviser, Economic Research Department, SBI, said in a report.
Before demonetisation, the total currency in circulation stood at Rs 17.97 lakh crore, according to November 4, 2016 data. SBI said that a total of Rs 14.27 lakh crore currency in circulation was enough for optimal remonetisation.
"The demonetisation move has the printing presses working overtime to replenish the currency to pre-demonetisation levels as quickly as possible," Ghosh said.
He also said that he believed that the RBI need not print the entire amount of extinguished currency.
"This is because first, already there was excess cash floating in the system before demonetisation took place. Second, the push for digital transactions has shifted a sizeable population towards less cash usage," Ghosh said.
"Around Rs 1.17 lakh crore worth of notes need not be printed. This will bring down cost of printing in the range of Rs 500-1,000 crore," the report said.
It stated that there was Rs 2.50 lakh crore excess cash in circulation prior to demonetisation.
Ghosh said that as much as Rs 1.20 lakh crore worth of transactions have shifted to digital mode.
"The process of demonetisation has opened up huge potential for digital channels. PoS (point of sale) machines, m-wallets and mobile banking are the major available channels for digital transactions," it said.
The recent data on digital payments published by the RBI indicates sharp growth in digital payments, including setting up of 5,476 PoS machines per day post-demonetisation.
The current size of digital banking (including credit card, debit card transaction through PoS terminals, transaction through Prepaid Payment Instruments like m-wallet, PPI cards and mobile banking) is around Rs 2.3 lakh crore.