It was the evening of November 8, 2016, that a public address by Prime Minister Narendra Modi took the entire nation by surprise when he announced the demonetisation of ₹1000 and ₹500 notes completely.
And now, the Reserve Bank of India (RBI) has planned a similar surprise for the nation.
According to two people in the RBI board who were aware of the development, India’s apex bank has now cleared a proposal to introduce notes of ₹200 denomination. The decision was taken in RBI board meeting in March.
According to a report by Hindustan Times, the two members of the board wished to stay anonymous as they weren’t authorised to speak to the media. However, a spokesperson of the RBI declined to make a comment on the information.
Printing of the new notes is expected to start after June, once the government gives its approval to the new denomination.
The decision to introduce a new denomination of banknotes is to revise the currency mix in the Indian market. While ₹17.9 trillion were in circulation prior to demonetisation, as of 24th March, the amount stands at ₹13.12 trillion.
While the government may not increase the currency in circulation to match pre-demonetisation levels to encourage online payments, it might still need to increase it a little as there are many ATMs still running dry in the nation. Moreover, in a nation where the internet is still a luxury and literacy rates are poor in most rural areas, online transactions are easily said than done.
News Source: Hindustan Times