New Delhi: The finance ministry on Wednesday notified the issue of ₹ 200 notes, making them legal tender and paving the way for their circulation.

“In exercise of the powers conferred by sub-section (1) of section 24 of the Reserve Bank of India Act, 1934, and on the recommendations of the central board of directors of the Reserve Bank of India (RBI), the central government hereby specifies the denomination of banknotes of the value of two hundred rupees," the notification stated in the Gazette of India.

On 3 April, Mint first reported RBI’s plan to introduce ₹ 200 notes. On 25 July, Mint reported that RBI had shifted focus from printing ₹ 2000 notes to ₹ 200 notes of which a billion were expected to be printed.

On Wednesday, economic affairs secretary Subhash Chandra Garg tweeted: “Govt has today specified denomination of banknote of ₹ 200 value. Soon this note will get added to the bucket of currency notes in India."

Finance minister Arun Jaitley said RBI will decide the date for issuing the new ₹ 200 notes.

He added that the government is not considering withdrawal of the ₹ 2000 currency notes.

RBI had on 18 August announced that a new ₹ 50 note will be issued shortly under the Mahatma Gandhi series, while notes issued under the earlier series will remain legal tender.

In a surprise announcement, Prime Minister Narendra Modi on 8 November 2016 announced scrapping of old ₹ 500 and ₹ 1000 currency notes, wiping out over 85% of the cash in circulation.

RBI data shows that currency in circulation stood at ₹ 15.70 trillion as on 11 August, over nine months after demonetisation. This is about 88.70% of the ₹ 17.7 trillion that was in circulation on 4 November 2016.

Introduction of a ₹ 200 note will fill in the “missing middle", State Bank of India (SBI) said in a report in July. The report had noted that though there has been a significant move towards shifting distribution of currency to smaller denominations post demonetisation, there is a mismatch caused by the presence of ₹ 2000 notes right after ₹ 500 notes.

“Herein lies the paradox. Notes of ₹ 2000 denomination in ATMs may find few takers because of missing middle—the ₹ 200 note," the SBI report added.

Subscribe to Mint Newsletters * Enter a valid email * Thank you for subscribing to our newsletter.

Share Via