The Indian economy is likely to see circulation of new currency notes in yet another move to curb black money and also to strike a balance between the circulation of present ones.
According to reports, the Reserve Bank of India (RBI) has stopped printing INR 2,000 notes and is unlikely that RBI will revert to printing them even in the new financial year. The focus is now on the printing of notes of other denominations, including INR 200 notes.
The INR 2,000 notes were introduced in the Indian economy in 2016 when Indian Prime Minister Narendra Modi curtailed the use of the old INR 500 notes and INR 1,000 notes in order to curb the circulation of black money. A similar move is now being anticipated with introduction of more new notes.
“Most of the printing that’s being done, about 90 pc is only INR 500 notes. Nearly 14 billion pieces of new INR 500 notes have been printed so far,” a source told the Indian media on condition of anonymity.
Another anonymous sources stated that the RBI has already started printing the new INR 200 notes at its printing press in Mysuru , and the new notes are likely to be in circulation next month onwards.
Meanwhile, the new INR 500 notes are expected to fill the shortcomings that will arise after the cessation of INR 2,000 notes.
“The cash crunch that existed till two months ago has now eased with RBI increasing supply of INR 500 notes over the last 40 days,” Indian media quoted Neeraj Vyas, deputy managing director, State Bank of India (SBI). “But we have also seen a sharp drop in the supply of INR 2,000 notes during this period.”
According to SBI chief economist Soumya Kanti Ghosh, RBI is possibly keeping the supply of INR 2,000 bank notes low so that the central bank gets to balance the flow of various currency notes in the market and have a right mix.