Demonetisation undoubtedly lead to a cash crunch. As the 500 and 1000 denominations were put out of legal circulation and the new 2000 currency notes were introduced, there was a dearth of small currency which lead to inconveniences in day-to-day transactions.
It’s been over six months since demonetisation, and difficulty in making regular transactions has almost vanished. Now, the RBI is making another move to further ease of transactions. It placed an order for the printing of Rs 200 bills a few weeks ago which are now being printed at a government-owned facility.
“For day-to-day transaction purposes, the introduction of 200 rupee notes will add to the ease of operations,” said Soumya Kanti Ghosh, group chief economist at the SBI Group.
The RBI board had earlier cleared the proposal to issue banknotes of Rs 200 denomination. The government, too, had examined the introduction of the new notes that would help citizens transact easily.
Before the demonetisation move, there were roughly 1,650 crore pieces of Rs 500 notes in circulation. As these were removed from the system, a large gap was created in the value of notes in circulation. The withdrawal of the 500 and 1000 currency notes accounted for 86% of the currency that was in circulation during the time worth Rs 17.9 lakh crore.As on June 9 this year, the currency in circulation in the economy was worth Rs 14.6 lakh crore, still 18.4% lower than the pre-demonetisation level.
The printing of the Rs 200 notes will fill the void. “A minor part of that has been replenished by 2000 rupee notes and a larger part by the new 500 rupee notes, though not in full. The introduction of 200 rupee notes will replenish the missing middle, triggered by the withdrawal of the old series of 500 rupee notes,” said Ghosh.
The new 200 notes will carry advanced security features and adequate precautions are being taken to prevent counterfeiting. As of now, these notes are going through different levels of security and quality checks at the government’s press unit at Hoshangabad (Madhya Pradesh).