RBI wants to circulate new ₹200 notes through banks, not ATMs
The move is aimed at avoiding another chaotic ATM recalibration process
NEW DELHI: The Reserve Bank of India (RBI) is likely to decide against circulating proposed new ₹200 banknotes through ATMs to avoid another chaotic recalibration process similar to the one that followed the recall of highvalue currency last November.
The central bank wants to circulate the new notes only through bank branches, similar to the way ₹50 and ₹10 notes are circulated.
The RBI board in March cleared a proposal to introduce ₹200 notes to plug the paucity of lower denominations. The mints are likely to start printing the new notes from June.
A senior banking official – who refused to be quoted because he isn’t authorised to talk to media – said dispensing new currency notes through ATMs would mean recalibrating India’s 2,20,000 machines, an exercise that will take more than a month.
These ATMs were just reprogrammed to dispense the new ₹2,000 notes.
“The idea is not to disturb the system once again. There has been disruption for more than four weeks between November and December and it is advisable to circulate these notes through the bank branches, though at present these are just proposals,” the official told Hindustan Times.
The proposal to introduce ₹200 notes is part of a larger focus by the government and RBI on circulating lower denomination currency notes of ₹100 and ₹500. “People are still reluctant to take ₹2,000 and therefore there is still a shortage of currency notes and the need is to have lower denomination notes,” said the official. The problem was aggravated because the government and RBI couldn’t circulate ₹1,000 notes.
In a late-night address on November 8, Prime Minister Narendra Modi withdrew ₹500 and ₹1,000 notes, sucking out roughly 86% of the cash in circulation. The government’s exercise to replenish the cash in the system is expected to be completed by the middle of April after months of cash crunch, a State Bank of India report said.
A sum of ₹15.44 lakh crore was sucked out of the system by demonetisation. Before the exercise, ₹8.58 lakh crore comprised ₹500 notes and ₹6.86 lakh crore in ₹1,000.