With the introduction of new denomination of ₹2,000 notes after the demonetisation drive in November last year, something still seems to be missing. The day to day transactions cannot be carried out with ease as the ATMs disperse ₹2,000 notes mostly.
To address this issue, the government has already starting printing a never before denomination of ₹200 notes which are expected to be released before end of 2017.
Soumya Kanti Ghosh, the Chief Economist at the SBI Group said, “For day-to-day transaction purposes, the introduction of 200 rupee notes will add to the ease of operations..”.
Why ₹200 Notes?
Due to demonetisation as well as capping on the withdrawal amount, the amount of cash that banks hold has significantly increased. Despite the fact that there has been a noteworthy rise in the circulation of cash towards smaller denominations post demonetisation, there is a disparity caused by the difference between ₹2,000 notes straight after ₹500 category.
Excess Cash with Banks
An ATM machine usually holds 10,000 bills and if we assume that the ATM contains only ₹100 notes, the number and cost of supply of those notes significantly increases. This implies that on an average ₹25,000 Crore of excess currency may be currently lying in ATMs alone.
Strike A Balance
The ₹200 notes are being introduced to not only make things easy for the common man who hesitates while using a ₹2,000 currency note but also strike a balance between the excessive demand and short supply of lower denominations.
Security and Withdrawl
There are reports that to stop counterfeiting these state of the art currency notes will have advanced security features, few of which will be launched in India for the first time. Also a proposal is made to the RBI and as per the suggestion the distribution channel for these ₹200 notes will not be ATMs but they’ll be distributed directly via Bank Branches to avoid similar chaos that happened when ₹2000 notes were introduced.
When Will ₹200 Notes be Introduced?
The ₹200 notes are expected to be introduced before end of 2017 as the printing of the same has been initiated by Reserve Bank of India.
What Else?
New ₹1 Currency Note is also under process and will be re-introduced soon to combat the smuggling of ₹1 coins which are converted to Razor blades in the countries where they are smuggled.
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