RBI to introduce Rs 200 notes soon; Jaitley says no ban on Rs 2,000 notes

Finance Minister Arun Jaitley on Wednesday put all the rumours regarding demonetisation of Rs 2,000 notes to rest, saying that the government is not considering banning Rs 2,000 notes. Jaitley also said the government has given its go-ahead to the RBI to issue Rs 200 notes.

Just days after introducing new notes of Rs 50 denomination, Reserve Bank of India (RBI) will bring Rs 200 note into circulation for the first time in history. Some media reports said the new Rs 200 notes are likely to be put in circulation by the end of August or in the first week of September.

The central bank's plan to add Rs 200 denomination note into circulation is expected be a big relief as it gets hard at times to find change for Rs 500 note. Currently, there is no denomination between Rs 100 and Rs 500, the introduction of Rs 200 note is likely to make cash transactions smoother.

The Finance Ministry, in a Gazette notification, has confirmed that a new Rs 200 note will be issued by the Reserve Bank of India. In the notification, the Centre said that the Rs 200 note's specification was being done on the recommendation of the Central Board of Directors of the RBI.  

"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 Central Government hereby specifies the denomination of bank notes of the value of two hundred rupees," an official government notification said. 

The Rs 2,000 denomination notes were introduced last year in November when Prime Minister Narendra Modi announced demonetisation of high value currency notes to curb black money.

The government has given the go-ahead to the RBI to issue Rs 200 notes, a move that is aimed at easing the pressure on lower-denomination currency. "The whole process regarding by when the notes will be printed, RBI will take care of that issue. Thus, it would be appropriate for the RBI to announce about dates and related matters to the note printing," Jaitley said.

Andhra Pradesh Chief Minister N Chandrababu Naidu had earlier asked the Centre to scrap the banknotes of Rs 2,000 and Rs 500 denomination to speed up digital payments.

"It was I who first demanded abolition of Rs 1,000 and Rs 500 notes. Now, they brought Rs 2,000 and Rs 500 notes but they too should be scrapped," Naidu, who heads a panel of chief ministers on digital economy, had said.

Two Reserve Bank of India printing presses under Bharatiya Reserve Bank Note Mudran Private Limited - an RBI subsidiary that prints banknotes - from Mysore and Salboni are printing the new Rs 200 notes.

(with inputs from PTI)