In a bid to avoid illegal currency trade, the Reserve Bank of India is keeping a close track on the surveillance of currency circulation. The Central Bank is prepping up to introduce Rs 200 denomination bank notes. This will be the first time 200-rupee denomination notes will circulate in the Indian history.
In a Gazette issued by the Finance Ministry of India on Wednesday, it stated,” In exercise of the powers conferred by sub-section (1) of section 24 of the Reserve Bank of India Act, 1934 and on the recommendations of the Central Board of Directors of the Reserve Bank of India, the Central Government hereby specifies the denomination of bank notes of the value of two hundred rupees”.
According to sources privy to the development, “There is the absence of other denomination notes between Rs 100 and Rs 500 and RBI is expecting Rs 200 notes. Owing to its rising demand even before release, the government is taking every step to ensure full availability of the same.”
According to Soumya Kanti Ghosh, group chief economist at State Bank of India, the introduction of Rs 200 note is a great step. “A large number of new currency notes will thwart the operational difficulties which may be faced by a common man.”
According to sources, the government’s plan to curb counterfeiting and untaxed cash in India encapsulates the introduction of Rs 200 currency notes.
“If the proportion of higher denomination notes is large in the total currency in the circulation, it incentivizes hoarding and generation of unaccounted money,” Ghosh added.
Before demonetization, there were 1,717 crore notes of Rs 500 and 686 crore of Rs 1,000. However, after demonetization the citizens started to use Rs 100 notes more than Rs 500 and Rs 2000, as they feared of chances of second dose of demonetization.
