The Centre’s controversial move of removing high-value banknotes from circulation may come up for discussion when Finance Minister Arun Jaitley holds a pre-Budget meeting with bank chief executives, heads of financial institutions and NBFCs on Tuesday.
Demonetisation-related issues are also expected to come in for discussion during Jaitley’s separate pre-Budget meeting with economists on the same day.
The jury is still out on whether the government has been successful in tackling the menace of black money, and fake currency in full measure through the November 8 announcement of pulling out old ₹500 and ₹1,000 notes. In one fell swoop, 86.69 per cent of the available stock of currency in the country was removed from circulation and less than a quarter was replenished with newly-printed ₹2,000 notes.
The demonetisation move has definitely put both public and private sector banks in a spot, and exposed their limitations in handling the abrupt announcement. Some unscrupulous bank officials have also taken advantage of demonetisation to line their pockets.
Going by an RTI response to a Mumbai-based activist, RBI on November 8 had only ₹4.94 lakh crore in ₹2,000 notes. This was about one-fourth of the over ₹20 lakh crore it had in demonetised currency notes.
While the RBI had ₹9.13 lakh crore in ₹1,000 notes on November 8, it had ₹11.38 lakh crore in ₹500 notes. On that day, the RBI said it had 2,473 million pieces of ₹2,000 notes worth ₹4.94 lakh crore.
Other issuesTuesday’s meeting may also see bankers discuss their Budget wishlist with the government, including scope for further capital infusion. Issues, such as tackling of non-performing assets and the likely impact of GST on the financial sector are also likely to be discussed.
Indications are that a case would be made for providing easier eligibility norms for NBFCs to avail refinance from MUDRA.