The government of India has confirmed that Rs 200 notes will soon become a reality. News has it that the printing has begun and could hit the markets soon.

 

In India, Rs 200 notes will be introduced for the first time. This apparently is to add efforts towards 'remonetisation'. Also, to bring a middle missing currency, considering the huge gap between Rs 500 and Rs 2000 notes. “Herein lies the paradox. Notes of Rs2,000 denomination in ATMs may find few takers because of missing middle/Rs200 note,” the State Bank of India (SBI) Ecowrap report said. The Reserve Bank is reportedly expected to introduce Rs200 notes in the coming months to ease pressure on lower- denomination currencies that are in short supply.

 

The printing has already begun and as per reports the notes are printed at Government-run Security Printing and Minting Corporation of India Ltd and at printing presses in Mysore (Karnataka) and Salboni (West Bengal).

 

Demonetisation was introduced in November last year, and was soon ensued by chaos and long queues outside banks and ATMs. Some reports indicate that Rs 200 notes will feature advanced security features. It is believed that among these new likely features, some would be introduced for the first time. 

 

According to a report in The Economic Times, The new 200 notes will carry advanced security features. The authorities are taking extra precaution to prevent counterfeiting, citing source. These notes will reportedly go through varying level of checks for security and quality.

 

Earlier this year, a Hindustan Times report claimed that the Rs 200 notes may not circulate through ATMs. The reason? To avoid chaos like we saw during demonetisation. These notes will come only via bank branches.

 

Demonetisation has led to withdrawal of Rs 500 and Rs 1,000 currency notes. At that time, about 86% of Rs 500 and Rs 1000 currency notes were in circulation that amounted to Rs 17.9 lakh crore. By early June, Rs 14.6 lakh crore of currency is in circulation with public.

 

Cash with banks, a CIC component, has however witnessed a decline over November 2016 level, said the State Bank of India (SBI) Ecowrap report. The data for 23 June 2017 shows cash in hand with banks declining to 5.4% of the currency in circulation from a high of 23.19% for the fortnight ended 25 November 2016, it said. Going by historical trends, cash in hand with banks is roughly 3.8% of CIC and is currently at 5.4%. This means at least an additional amount of 1.6%/ Rs25,000 crore of excess currency may be currently lying in ATMs and herein lies the importance of new Rs200 notes which could serve as the “missing middle” the report adds.

 

The new notes of Rs 200 should be out before the end of 2017 and will greatly help in narrowing the demand and supply gap in smaller-denomination currency bills. A Rs 200 note image has been circulating online, but its authenticity is still unclear.

 

With inputs from PTI