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What is the minimum time needed to complete the demonetisation process?
There are roughly 1,30,000 bank branches available to replace old notes with new notes. That means each bank branch will have to exchange 1,69,230 notes. There is no limit to deposit old notes in savings accounts and current accounts.
But some people exchange 8 notes, some people deposit 100 notes in savings accounts, and traders, businessmen, cinema halls, petrol stations and hospitals deposit 1000s of notes in current accounts. Let us assume that each deposit of notes is an average number of 100 notes then there would be 22 crore bank transactions for depositing 2200 crore old notes [500 and 1000 denomination].

If each bank takes 200 deposits per day then 1,30, 000 bank branches will take 260 crore notes [500 and 1000 denomination] each day. That means the whole operation of depositing 2200 crore old notes in savings and current accounts should be completed within 10 days maximum.

This is possible even if we do not count the cash depositing machines in urban areas. If we add over 1 lakh post offices to take deposits then the depositing of all old notes would be completed within 5 days.

Cash withdrawal of new notes:

If we assume that the total number of new 2000 notes and 500 notes are also exactly same as the old notes then the time taken to put new notes into circulation should be not more than 30 days

Minimum level - If the daily release of these notes from 1,30, 000 bank branches and over 200,000 ATMs with 300 transactions at an average of 2 notes from the ATM and 2 notes from the bank branch then the total number of notes released into circulation each day = 1,30,000 + 2,00,000 = 3,30,000 x 300 x 2 = 18,30, 000 ,00 notes.

If each ATM is stacked with 4000 of 2000 rupee denomination notes and 4000 of 100 rupee denominations per each day. Total number of days to be taken for putting new notes into circulation = 120 days = 4 months if ATMs are loaded once per day. If ATMs are loaded twice on each day then the time taken for putting new notes into circulation would be only 2 months.

If the government increases the cash withdrawal limit up to 8 notes per day with loading of ATMs only once on each day, if there is enough printed notes, then the whole exercise would be completed within 30 days. If the ATMs are loaded twice on each day then the whole exercise of exchange of old notes with new notes would be completed within 14 days.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of In case you have a opposing view, please click here to share the same in the comments section.
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