The Reserve Bank of India (RBI) will shortly issue new Rs 10 notes under the Mahatma Gandhi series. The central bank has already printed around 1 billion pieces of the new Rs 10 note, according to three people familiar with the matter. With chocolate brown colour as the base, the new note will bear the picture of Konark Sun Temple.
The design received the go-ahead from the government last week, said the two of the people cited earlier. The change in design in the old Rs 10 note was last made in 2005. In August last year, RBI had introduced the new Rs 200 and Rs 50 notes under the Mahatma Gandhi series. An RBI spokesperson declined to comment.
The move to reintroduce lower denomination notes in a new design comes after the government’s move to rework the currency mix in order to combat counterfeiting and promote a less-cash economy.
On 8 November 2016, the government announced demonetisation to withdraw Rs 1,000 and Rs 500 currency notes, amounting to around 86% of the currency in circulation of Rs 17.9 trillion. Since then, RBI has replaced these with the new Rs 2000 notes and redesigned Rs 500 notes.
RBI has printed 16.96 billion pieces of Rs 500 notes and 3.6 billion pieces of Rs 2000 notes as on 8 December, according to information given by the finance ministry in Lok Sabha. The total value of such notes translates into Rs 15.79 trillion.
Separately, the regulator had also reissued around 12 billion soiled banknotes of Rs 10, Rs 20 and Rs 50 denomination after the demonetisation resulted in a currency crunch. According to RBI, a soiled note is a currency note which has become dirty due to normal wear and tear.
RBI data show currency in circulation was Rs 16.71 trillion as on 22 December. This is about 94.4% of the Rs 17.7 trillion that was in circulation on 4 November 2016.
RBI’s annual report for fiscal 2016-17 also showed that the volume of banknotes increased by 11.1% mainly due to higher infusion of banknotes of lower denomination following demonetisation. The government’s rationale behind the move is to check fake notes which had seen a significant jump since 2008. From 195,000 pieces in fiscal year 2008, the number of counterfeit notes increased to 632,000 pieces in 2015-16.
“The idea is to increase supply of lower denomination to encourage day to day transactions and for larger transactions, people should move to digital mode of payment. Printing of lower denomination notes in new design will ensure soiled notes will be taken out from the system,” said Soumya Kanti Ghosh, group chief economic adviser at State Bank of India.
RBI has still not finished counting the old Rs 500 and Rs 1000 notes after demonetisation.