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RBI introduces Rs200 note, but ATMs will not dispense it yet

LiveMint logoLiveMint 28-08-2017 Vivina Vishwanathan

The Reserve Bank of India (RBI) is issuing Rs200 denomination currency notes of the Mahatma Gandhi (new) series. Select counters of RBI offices and banks will issue these notes, but it will be some time before you can get these notes from an automated teller machine (ATM).

To dispense Rs200 denomination notes, the ATM manufacturers will have to recalibrate the ATMs.

Currently, there are over 200,000 ATMs in the country. A typical one has three to four cassettes, each of which is equipped to handle different currency notes.

To be able to dispense Rs200 notes, the cassettes have to be re-configured, which will take time. Cassettes are small removable boxes that hold cash inside an ATM. Each cassette has to be configured to dispense a particular note. Currently, ATMs can dispense Rs100, new Rs500 and new Rs2,000 notes.

To re-configure the cassettes, ATM service providers will need to get the new notes to know things like its texture and thickness. Next, ATM providers and banks will also have to ascertain the supply of notes.

Each cassette can hold up to 2,500 notes. The ATM providers will not prefer to run the ATMs below capacity. Hence, they will also have to ensure sufficient supply of Rs200 denomination notes, to use the cassettes at full capacity.

Also, before all the ATMs are configured for this new currency note, they will have to be tested and approved for use the notes. Therefore, it may take a week for ATMs to start dispensing the Rs200 notes.

The RBI is introducing notes of Rs200 denomination to ease cash transactions, replace soiled banknotes and to combat counterfeiting.

The apex bank explained that there is need for an optimal mix of currency denomination in the system. The denomination should be twice or two-and-half times its preceding denomination.

In India, we have currency denominations of Re1 and Rs2, 5, 10, 20, 50, 100, 500 and 2,000. 

According to the RBI, in the lower end of the denomination series, Rs200 denomination currency note was missing. The central bank has said that by issuing the Rs200 denominated notes, it captures the missing link in the currency denominations.

The new denomination has a motif of Sanchi Stupa on the reverse and the base colour of the note is bright yellow. The note will carry signature of RBI governor Urjit Patel, year of printing on the left side, and Swachh Bharat logo with its slogan.

The dimensions of the note are 66 mm × 146 mm, according to RBI.

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