The board of the Reserve Bank of India (RBI) has cleared a proposal to introduce banknotes of Rs 200 denomination, two people aware of the development said. The decision was taken at the RBI board meeting in March, these people said. They didn’t want to be identified as they aren’t authorised to speak to the media. The process of printing the new Rs 200 notes is likely to begin after June, once the government officially approves this new denomination, said one of the two people cited earlier.
An RBI spokesperson declined to comment. The move to introduce lower denomination notes comes against the backdrop of the government’s move to rework the currency mix. On 8 November, it announced the withdrawal of Rs 500 and Rs 1,000 currency notes, amounting to around 86% of currency in circulation of Rs 17.9 trillion. Since then, RBI has replaced these with the new Rs 2,000 and redesigned Rs 500 bank notes. As on 24 March, currency in circulation was Rs 13.12 trillion, still around 27% off pre-demonetization levels. The government is encouraging digital payments and may not increase currency in circulation to the pre-demonetization level.
On 13 March, RBI lifted all cash withdrawal caps. ATM operators, however, say that there is a paucity of lower denomination banknotes. So far, the central bank has not revealed how many of the old currency notes it has got back from the public. The window for Indians who were out of the country between 8 November and 30 December ended on Friday. The RBI board has 14 members. Apart from governor Urjit Patel and four deputy governors, the board also has economic affairs secretary Shaktikanta Das and financial services secretary Anjuly Chib Duggal.