The Reserve Bank of India (RBI) will issue the first-ever INR 200 denomination bank notes tomorrow. The currency note is expected to address liquidity issue and also reduce the burden on the INR 100 note.
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The Reserve Bank of India will issue on August 25, Rs 200 denomination banknotes in the Mahatma Gandhi (New) Series, bearing the signature of Dr. Urjit R. Patel, RBI Governor," RBI said in a release.
Here’s what the release says
The Reserve Bank of India will issue on August 25, 2017, INR 200 denomination banknotes in the Mahatma Gandhi (New) Series, bearing the signature of Dr. Urjit R. Patel, Governor, Reserve Bank of India from select RBI offices, and some banks. The new denomination has Motif of Sanchi Stupa on the reverse, depicting the country’s cultural heritage. The base colour of the note is Bright Yellow. The note has other designs, geometric patterns aligning with the overall colour scheme, both at the obverse and reverse.
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.
Providing the Missing Link
The optimal system of denominations of currency (coins and notes) is one that would minimize the number of denominations and concurrently increase the probability of proffering exact change. So, what should be the optimal mix of currency denominations? Many countries have opted to use a near variation of the Renard Series, i.e., 1:2 or 1:2.5 ratio between adjacent denominations of currency, which means that the denomination should be twice or two and half times of its preceding denomination. Such a ratio allows the exchange of value ordinarily in a maximum of three denominations. In India, we have currency denominations of ₹ 1, 2, 5, 10, 20, 50, 100, 500 and 2000. As such, in the lower end of the denomination series, ₹ 200 is the missing one.
Ease of Facilitating Exchange
To achieve the optimal system of currency that would minimize the number of denominations while increasing the probability of proffering exact change, especially at the lower end of denominations, there is a logical need to introduce the missing denomination of ₹ 200, which will make the present currency system more efficient. Provision of the new denomination, therefore, would facilitate exchange, particularly for the common man who deals with denominations at the lower end.
Jose J. Kattoor
Chief General Manager