Remonetization: Where Will the Cash Supply Stop?

In a historic decision on November 8th, Prime Minister Narendra Modi flushed the then 500 and 1,000 rupee notes, which accounted for 86 percent of the total currency in circulation. These notes account to 15.6 Lakh Crore of money in total.

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In the place of junked notes, RBI is issuing new notes of 500 and 2,000 rupee notes with added security features. A total of 11.73 Lakh Crore was replaced with this new notes. It has to be seen if the government stops the printing of the notes somewhere to discourage cash economy.

This gap for now means there is the shortage of cash. RBI on the other side, removed all the limits on cash withdrawals from Monday in Savings Accounts. But then the banks are still imposing limits on cash withdrawals at branches and ATMs.