THE government's decision to remove 500- and 1,000-rupee notes from circulation resulted in an unprecedented situation marked by chaos and uncertainty, the most visible signs of which were the interminable queues at ATMs. The country was clearly underprepared to handle a situation where 86 per cent of the notes in circulation were suddenly deemed worthless for commerce.
The lack of preparedness comes as no surprise looking at data from the Reserve of Bank of India (RBI), which show that there are barely two lakh ATMs for a population in excess of 121 crore. The number of credit cards issued in the country is around 2.59 crore, while debit cards are exponentially higher around 69.72 crore.
However, the average monthly credit card spend was significantly higher around Rs.9,382 (for July 2016, the latest month for which figures were available), compared with a paltry Rs.245 for debit cards.
The country's money stock has also been steadily rising over the past five years.
While the currency with the public rose from Rs.10,653.04 billion in October 2012 to Rs.17,013.81 billion in October this year, the value of notes in circulation also zoomed from Rs.10,952.94 billion to Rs.17,540.22 billion during the same period.