The Reserve Bank of India (RBI) is taking action to recall Rs. 200 notes from circulation, but there’s no need for concern or confusion. Unlike the recent withdrawal of Rs. 2000 notes from circulation, this move is not demonetization. Instead, the central bank has removed Rs. 200 notes worth around Rs. 137 crore because of their deteriorated condition.
This action has been part of the RBI’s ongoing efforts to clean up the currency in circulation. Torn, dirty, and damaged notes are regularly pulled out of the system to maintain the quality of the money in people’s hands. Over the past six months, the RBI has been particularly focused on Rs. 200 notes due to a sharp increase in the number of defective notes.
Why Are Rs. 200 Notes Being Withdrawn?
The Rs. 200 notes that are being removed from circulation are not being demonetized but simply pulled back due to damage. In its latest half-yearly report, the RBI pointed out that these notes showed the highest signs of wear and tear. Some were torn, some damaged by handling, and others had writing on them, which made them unfit for circulation.
The poor condition of these notes made it necessary for the RBI to remove them. The same report also highlighted that the removal of Rs. 200 notes this year has increased by 110% compared to the previous year. This increase in damaged Rs. 200 notes is partly attributed to their more frequent use following the withdrawal of Rs. 2000 notes.
History Repeats: Rs. 135 Crore of Rs. 200 Notes Pulled Last Year
This isn’t the first time the RBI has had to take such action. In the last financial year, the central bank removed Rs. 200 notes worth Rs. 135 crore for the same reasons – they were either dirty, torn, or damaged beyond use. It seems the increased usage of this denomination in the market has led to their faster degradation.
Rs. 500 Notes Still Top the List of Damaged Currency
While the Rs. 200 notes are making headlines now, the highest value of damaged notes still belongs to the Rs. 500 denomination. According to the RBI, during the last financial year, approximately Rs. 633 crore worth of Rs. 500 notes were withdrawn because they were damaged or mutilated.
However, in the first half of this financial year, the number of Rs. 500 notes being pulled back has reduced by 50%, while the recall of Rs. 200 notes has more than doubled.
Other Notes Being Pulled from Circulation
It’s not just Rs. 200 and Rs. 500 notes that are being recalled. Smaller denominations are also seeing significant withdrawals due to damage. For instance, Rs. 5 notes worth Rs. 3.7 crore, Rs. 10 notes worth Rs. 234 crore, Rs. 20 notes worth Rs. 139 crore, Rs. 50 notes worth Rs. 190 crore, and Rs. 100 notes worth Rs. 602 crore have all been removed from the market.
What’s Next for the Rs. 200 Note?
The recent increase in damaged Rs. 200 notes is a sign that the RBI is keeping a close watch on the quality of currency in circulation. However, there’s no indication that the Rs. 200 note will face demonetization or be phased out. The central bank is merely working to ensure that only clean and usable currency remains in circulation, helping to maintain the overall quality of money in the market.
The RBI is expected to continue monitoring the condition of currency notes, and further withdrawals of damaged notes will likely take place to keep the system running smoothly. For the common man, this means no need for concern, just an ongoing effort by the central bank to maintain the integrity of India’s currency system.
