RBI to introduce Rs 200 notes by first week of September

The circulation of new Rs 200 notes will ease pressure on lower-denomination currencies that are in short supply.

New Delhi: The Reserve Bank is expected to introduce Rs 200 notes by the end of August or in the first week of September, reports Economic Times, quoting sources.

The government on Wednesday also gave its go-ahead to the Reserve Bank to issue Rs 200 notes that will ease pressure on lower-denomination currency bills.

The finance minisatry, in a notification, said that on the recommendations of the Central Board of Directors of the RBI, "the central government hereby specifies the denomination of banknotes of the value of two hundred rupees".

The new notes of Rs 200 will greatly help in narrowing the demand and supply gap in smaller-denomination currency bills.

Last year in November, the government had demonetised the old 500 and 1,000 rupee notes.

This exercise of printing Rs 200 denomination notes is being undertaken to further improve the currency situation in the country, PTI has earlier reported quoting sources, adding the problem people are facing due to high-value Rs 2,000 notes would also be taken care of with the circulation of Rs 200 notes.

The central bank had reportedly decided to bring in Rs 200 notes in March after consulting the finance ministry, they said. The notes are going through multiple checks for security and quality at government printing presses.

The shortage of currency notes was trigged by the scrapping of high-denomination bills last year.

In a surprise announcement, Prime Minister Narendra Modi had in November last year announced scrapping of old notes of Rs 1,000 and Rs 500 notes, wiping out over 85 percent of the cash in circulation.

The move was aimed at checking black money, counterfeit notes and terror financing.

Pradhan Mantri Garib Kalyan Yojana (PMGKY) launched following the closure of 50-day demonetisation period did not draw a good response with only Rs 5,000 crore unaccounted income being declared under the amnesty scheme.

The scheme was launched in December last year to enable people with black money to come clean by paying tax and penalty of 50 per cent.