Money & Banking

Why the ₹200 note is yet to gain currency

LN Revathy Coimbatore | Updated on January 08, 2018

Elusive Not many, except some bankers and a few elite customers, have actually seen the ₹500 notes , and even fewer have held a couple in their wallets   -  C Venkatachalapathy

Short supply, ATMs not being calibrated cited as key reasons

It has been close to two months since the RBI announced the issue of new bank notes in the denominations of ₹200 and ₹50. But not many, except some bankers and a few elite customers, have actually seen them, and even fewer have held a couple in their hands.

A cross-section of bankers in Coimbatore said they were not issuing the new notes as the supply was not much. “We tender it only if a customer asks, and that too maybe 5-10 notes, and not a bundle,” said an officer of a private bank.

ATMs have not yet been calibrated for loading the ₹200 and ₹50 banknotes. So most customers don’t seem to have laid their hands on these notes yet and hence they have not come into wider circulation.

Another bank officer made an interesting observation about the size of the new ₹200 note being smaller than the ₹100 note. “When you place the currencies in the wallet in descending order, the new ₹200 note (asalso the ₹500 note), is smaller than the ₹100 and ₹20 notes. It is not very convenient to arrange the currency,” she said.

A staff member of a public sector bank in Sirumugai, a weavers’ hub about 38 km from Coimbatore, said that the bank widely distributed the new ₹200 notes among its customers just ahead of the festival season. “We wanted to sensitise them, and also felt there would be a need for the new ₹200 note (during the festival season),” he added.

This is in direct contrast to how the situation was when the ₹2,000 denomination currency was first introduced after demonetisation in last November. There was an all-round clamour to get hold of the ‘pink’ note.

However, before long, people’s enthusiasm to pocket a bunch of high-denomination notes died as smaller denomination currencies, including the new ₹500 note, were not easy to come by and people found it difficult to exchange such notes in day-to-day transactions.

Since then (November 2016 to February 2017), the situation has improved considerably and the new ₹500 note has since been adequately pumped into the system.

Published on October 22, 2017

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