India’s central bank will soon issue a new Rs 10 note in chocolate brown colour. The Reserve Bank of India (RBI) has already printed 1 billion pieces of the new note, Livemint reported quoting sources. Further, the new note will bear the picture of Konark Sun Temple.
The design received the go-ahead from the government last week, said the two of the people cited earlier. Earlier in 2005, the central bank had changed the design of the old Rs 10 note. In August-17, RBI had introduced the new Rs 200 and Rs 50 notes under the Mahatma Gandhi series. The move is aimed at achieving RBI’s aim to promote a less-cash economy. The central bank had undertaken a slew of measures to move towards a less-cash economy. Just last month, RBI rationalised the Merchant Discount Rates, with a view to achieving the twin objectives of promoting less-cash economy and ensure all stakeholders do a profitable business.
Value of digital transactions across the country has increased by 80% with the total amount expected to reach Rupees 1,800 crore in 2017-2018, official data suggests. The value of digital payments till October this year was at Rupees 1,000 crore, nearly equal to the value for entire 2016-2017. According to the Ministry of Information Technology, digital payments registered Rs 136-138 crore on an average from June-August keeping on the trend from the beginning of the year.
A recent SBI report finds that India’s apex bank may either be holding back Rs 2,000 notes or could have stopped printing high denomination currency. The report, authored by SBI’s chief economist, Soumya Kanti Ghosh, cited data submitted by Finance Ministry to the Lok Sabha which said the value of Rs 2,000 notes were Rs 7,308 billion as on December 8, while the value of small denomination currency in circulation up to March 2017 was Rs 3,501 billion, according to RBI’s annual report.
Further, the RBI had printed 16,957 million pieces of Rs 500 notes and 3,654 million pieces of Rs 2,000 notes as on December 8, according to information from the ministry. The total value of such notes amounts to Rs 15,787 billion. This implies that the value of high denomination notes was equivalent to Rs 13,324 billion as on December 8 after we net out the small denomination notes from the currency in circulation on December 8.
“This means that the residual amount of high-value currency notes of Rs 2,463 billion may have been printed by the RBI but not supplied in the market,” says that report adding, “It is safe to assume that ₹2,463 billion may be on the lower side as the RBI must have printed notes of small denomination in the interregnum (₹50 and ₹200).” But why would the apex bank actually hold back the notes? Soumya Kanti Ghosh says that the big denomination notes led to difficulties in transactions.
“As a logical corollary, as 2000 denomination currency led to challenges in transactions, it thus indeed seems that RBI may have either consciously stopped printing the 2000 denomination notes/or printing in smaller numbers after initially it was printed in ample amount to normalise the liquidity situation,” the author observed in the report.
Further, the expert notes that the share of small currency notes in circulation has also increased. “This also means that the share of small currency notes in total currency in circulation now may have touched 35 percent in value terms,” the report said.