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India printing cash like it's going out of style because, well ... it's not

May 18, 2018

The Reserve Bank of India has initiated a 500 percent increase in bank note printing in order to ensure that citizens do not experience another cash shortage like one that occurred last month.

According to a report by DNA India, four bank note printing facilities in the country are running 7 days a week to amass cash reserves sufficient to meet revived demand following the demonetization of 500 and 2,000 rupee notes in November 2016.

Demonetization was the government's attempt to drive a shift in India from cash payments to electronic transactions. The action, which removed 86 percent of the nation's currency from circulation, forced strict limits on cash withdrawals from banks and ATMs across the country for several months.

Once restrictions were lifted, however, demand for bank notes returned to pre-demonetization levels. A sudden, unexplained three-fold increase in demand in April triggered yet another cash shortage, with the majority of ATMs in some parts of the country experiencing persistent outages.

According to the report, economists in India have suggested that additional stockpiles of bank notes might be required to meet the needs of India's growing, cash-based economy.