RBI introduces Rs200 denomination banknote

Reserve Bank of India (RBI) today announced that the new series banknotes of Rs200 denomination will be available from tomorrow, 25 August, which would help address the current shortage of lower-denomination currencies.

RBI said the Rs200 denomination banknotes in the Mahatma Gandhi (New) Series, bearing signature of Dr Urjit R Patel, governor of the Reserve Bank of India, will be issued 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, RBI said.

RBI said the introduction of a new currency denomination is in keeping with the considerations like ease of transactions for the common man, replacement of soiled banknotes, inflation and the need for combating counterfeiting.

RBI said the optimal system of denominations of currency (coins and notes) is one that would minimise the number of denominations and concurrently increase the probability of proffering exact change.

Many countries, RBI noted, have opted to use a near variation of the Renard Series, ie, 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 exchange of value ordinarily in a maximum of three denominations. In India, we have rupee denominations of 1, 2, 5, 10, 20, 50, 100, 500 and 2,000. As such, in the lower end of the denomination series, Rs200 is the missing one.

To achieve the optimal system of currency that would minimise 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 Rs200, 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, it added.