The Reserve Bank of India (RBI) needs to print currency notes worth Rs 3,79,980 crore to reach the pre-demonetization days when the currency in circulation was Rs 17,97,460 lakh crore. The latest data from RBI shows that the currency in circulation on April 21 was Rs 14,17,480 lakh crore.

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But bankers say a sizable portion of the cash in circulation is lying idle with banks in the form of deposits.

C Venkat Nageswar, deputy managing director (global markets), State Bank of India (SBI), said, "We have now reached 85% of the pre-demonetization levels. But about 40% of the cash in still lying in banks as deposits without being circulated. Earlier people were storing cash in their homes, and now they have got it to the banks. The currency circulation is very slow."

Some economists say that the RBI and the government may increase printing depending on the public demand. For example, the Rabi crop season could see increased printing of new currency notes.

Saugata Bhattacharya, chief economist at Axis Bank, said, "RBI may print higher amount of notes to meet the Rabi crop seasonal demand for cash. The government does not seem to have any target in mind while looking at the currency in circulation. Despite the increase in the country's GDP over the last eight months, I think the government will undershoot the Rs 17 lakh crore currency in circulation levels. That was very high level of cash which will certainly be discouraged. The government will push for digital payments to decrease the demand for cash."

But if one were to look at the pace of printing at RBI for the week ended Mach 31, the central bank had printed only Rs 22,190 crore worth of new currency notes when the year-end demand for cash had peaked. The printing of new notes peaked for the week ended March 10, RBI and the government presses printed new notes worth Rs 47,410 crore.

According to SBI Ecowrap report published on March 31, the current size of digital banking (including credit card and debit card, transactions through point-of-sale terminals, transactions through prepaid payment instruments like m-wallet, payment protection insurance cards, and mobile banking) is around Rs 2.3 lakh crore. This size has to increase from the current level to at least Rs 3.5 lakh crore (which is a conservative estimate of the gap between the actual currency in circulation and required currency in circulation).

The economic research wing of SBI says that it does not expect the government to print the entire amount of extinguished currency. This is because already there was excess cash floating in the system before demonetization took place. Even by a conservative estimate, there was a minimum of Rs 2.5 lakh crore excess cash before November 8, 2016, in financial transactions, according to an analysis by SBI Ecowrap.