India Government U-turns on Banned 1000 Rupee Comeback

Indians continue to face cash shortages after a government U-turn means fewer new banknotes will enter into circulation than promised.

Just a day after the central bank said the 1000-rupee note would reenter the economy after it was withdrawn in currency reforms three months ago, Secretary of Economic Affairs Shaktikanta Das stated there were “no plans” for reintroduction.

No plans to introduce ₹1000 notes. Focus is on production and supply of ₹500 and lower denomination notes.

— Shaktikanta Das (@DasShaktikanta) February 22, 2017

Sources told Cointelegraph that the lack of notes in circulation is creating major problems as ATMs and other outlets run out of cash.

Das added that the issue was “being addressed” but requested somewhat ironically that Indians only withdraw as much money as they need.

“Enough cash is available,” he said.

Enough cash available. Logistics issues of reloading ATMs more frequently being addressed.

— Shaktikanta Das (@DasShaktikanta) February 22, 2017

Cointelegraph reported Tuesday that the 1000 note was to make a comeback and that production was already in progress, although no date had been set for its reintroduction.

Preference is now likely being given to smaller notes due to reports of difficulties getting change for transactions in India’s overwhelmingly cash-based economy.

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Meanwhile, Bitcoin usage in the country continues its steady trend upwards. Data from Coin Dance for LocalBitcoins shows week-on-week increases, with recent exceptional peaks in line with those witnessed in many markets worldwide.

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