Currency gain: Finance ministry notifies issue of ₹200 notes
NEWDELHI: The finance ministry on Wednesday notified the issue of ₹200 currency notes, making them legal tender and paving the way for their circulation.
“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 government hereby specifies the denomination of banknotes of the value of two hundred rupees ,” the notification stated in the Gazette of India.
On April 3, Mint first reported RBI’s plan to introduce ₹200 banknotes. On July 25, Mint reported that RBI had shifted focus from printing ₹2,000 notes to ₹200 notes of which a billion were expected to be printed.
On Wednesday, economic affairs secretary Subhash Chandra Garg tweeted: “Govt has today specified denomination of bank note of ₹200 value. Soon this note will get added to the bucket of currency notes in India.”
Finance minister Arun Jaitley said RBI will decide the date for issuing the new ₹200 notes. He added that the government is not considering withdrawal of the ₹2,000 currency notes.
RBI on August 18 announced that a new ₹50 banknote will be issued shortly under the Mahatma Gandhi series, while notes issued under the earlier series will remain legal tender.
In a surprise announcement, Prime Minister Narendra Modi on November 8 announced scrapping of old ₹500 and ₹1,000 currency notes, wiping out over 85% of the cash in circulation.
RBI data shows that currency in circulation stood at ₹15.70 trillion as on August 11, over nine months after demonetisation. This is about 88.70% of the ₹17.7 lakhcro re that was in circulation on 4 November.
Introduction of a ₹200 banknote will fill in the “missing middle”, SBI said in a report in July.
The report noted that though there has been a move towards shifting distribution of currency to smaller denominations post demonetisation, there is a mismatch caused by the presence of ₹2,000 notes right after ₹500 notes.