RBI to print notes that people prefer

The Reserve Bank of India (RBI), which did not print a single piece of Rs 2,000 denomination currency note in 2019-2020, has commissioned a survey to assess the demand for cash as well as denomination preferences to help it print only those notes that people prefer.

The circulation of Rs 2,000 notes declined to a little over 27,000 lakh pieces this year from 33,500 lakh in 2018.

The survey is also expected to help the central bank in cutting the cost on security printing of notes. It spends close to Rs 5,000 crore each year on printing currency notes and managing them. The demand for notes has also come down due to the Covid-19 pandemic, it said.

In its annual report released on Tuesday, the RBI said it did not print any Rs 2,000 notes last year as it did not receive any orders. The government places orders for currency notes to the RBI.

According to experts, one reason for lower circulation and less number of orders could be that a lot of Rs 2,000 notes are currently being hoarded and the government may have decided to do away with them gradually.

The RBI’s survey — that will also gauge the level of satisfaction with the current banknotes and coins for normal as well as visually impaired people — has been postponed due to the lockdown, people privy to the development said.

The central bank had launched a banknote survey of consumers in October last year to check among other things the denomination preferences at the consumer level. When the survey resumes, it will also measure the awareness of people about various security features of the banknotes.

Rs 2,000 denomination notes constituted 2.4% of the total volume of notes at the end of March 2020, down from 3.3% at the end of March 2018. In value terms also, the share has came down to 22.6% at end of March 2020, from 37.3% in the same period in 2018.

On the other hand, the circulation of Rs 500 and Rs 200 denomination notes has gone up substantially, both in terms of volume and value over the three years beginning 2018.