Why the RBI is giving you the new Rs 200 note
The Reserve Bank of India (RBI) on Thursday announced that it would issue Rs 200 notes on Friday. “Introduction of a new currency denomination and design is done keeping in consideration various factors like ease of transactions for the common man, replacement of soiled banknotes, inflation and the need for combating counterfeiting,” the RBI said post the announcement.
(You can read about the salient features of the new note here ).Read more ↓
State Bank of India’s (SBI) group chief economic adviser Soumya Kanti Ghosh calls the Rs 200 note, the “missing middle”.
Ghosh points out, that post demonetisation, there was no note between Rs 500 and Rs 2,000 denominations, and hence the Rs 200 note would be useful and will ease smaller operational difficulties. “It will facilitate transactions, getting change for Rs 2,000 would be easier. And more importantly, hoarding of smaller notes is difficult so that too would be checked,” the economist said.
The Narendra Modi government in a surprise move on November 8, last year, had outlawed high value currency notes of Rs 500 and Rs 1,000 denominations overnight, in a bid to crackdown on black money and hoarding.
According to SBI’s estimates, in the pre-demonetisation period, 87 per cent of the currency in circulation constituted of high denomination notes. As an impact of what many call PM Modi’s “masterstroke” against black money, high value currency in circulation currently stands at around 70 per cent, according to India’s largest public sector lender.
Days after announcing the old notes as illegal tender, new currency notes of Rs 500 and Rs 2,000 denominations were introduced into the system to ease the severe liquidity crunch that hit the country. Post demonetisation, five new currency notes have been announced, including Thursday’s announcement — Rs 2,000, Rs 500, Rs 200, Rs 50, and Re 1. The Re 1 note had been discontinued in 1994.
While Rs 500, Rs 50 and Re 1 are redesigned notes, Rs 2,000 and Rs Rs 200 are both debutantes in the history of Indian currency.
The new Rs 200 note that will be issued from “select RBI offices, and some banks” from Friday, will not be available at ATMs (Automated Teller Machines) right away, as the machines would need recalibration before they can disburse the new currency.
“Since the length of the new 200 currency is different from the existing currency in circulation (100,500,2000), cassette calibration is required to be done. ATM manufacturers need to do a complete testing of the new 200 denomination currency and provide the parameters which need to be configured at the ATM by an engineer. At ATM switch level, we will require to do switch configuration and complete testing of new 200 denomination currency before implementation,” Euronet Services India managing director, Himanshu Pujara said. Euronet provides electronic payment services, offering ATMs, point of sale (POS) services, credit/debit card services, and other electronic financial services.
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