The Rs 1,000-denominated currency note, which was demonetized on November 8 last year, is coming back in a new avatar with enhanced security features.
Sources told DNA Money that the government would shortly start printing the new Rs 1,000 note to bridge the yawning gap between the existing Rs 500 and Rs 2,000 notes.
Preparations for the design and the paper for printing the Rs 1,000 note are in full swing. The new currency note with enhanced security features could be out as early as December 2017, said a person close to the development.
"The printing presses at Mysore and Salboni are getting ready to print the brand-new Rs 1,000 notes which will have enhanced security features," the person said.
"Printing of Rs 2,000-denominated notes stopped at least six months back and now the Rs 200 notes are getting printed at these presses. Next in line for printing is the Rs 1,000 note," the person added.
The Rs 1,000 note will ease day-to-day operations and be beneficial to the common man, especially in the rural and semi-urban areas which are dominated by low-value transactions.
India currently has currency denominations of Re 1, Rs 2, Rs 5, Rs 10, Rs 20, Rs 100, Rs 500 and Rs 2,000. While Rs 200 notes are being introduced to bridge the link between the Rs 100 and Rs 500 value notes, Rs 1,000 is set to narrow the wide gulf between the Rs 500- and Rs 2,000-denominated notes.
Globally, countries have opted to use the Renard series for convenient use of currency. In this system, the ratio between adjacent denomination of currencies is 1:2 or 1:2.5. This means the denomination should be twice or two-and-half times of its preceding denomination. Such a ratio allows exchange of value ordinarily in a maximum of three denominations.
India already had Rs 1,000 currency notes, which was demonetized on November 8, 2016. The new Rs 1,000 notes will have improved security features compared to the extinguished Rs 1000 notes.
"The Rs 2,000 note will continue to exist but the focus will be on the lower-denomination notes. The Rs 2,000 note was printed for faster remonetization but in hindsight, the government has realised that lower value denominations should be the focus," the source said.
"The new Rs 1,000 note will bridge missing link between the existing Rs 2,000 and Rs 500. Right now, the next denomination after Rs 500 is Rs 2,000 which creates a big gap impacting the ease of transactions," a banker said.
RBI on August 25 released both the Rs 200 and Rs 50 notes. The existing Rs 50 that is already in circulation will continue to be in circulation along with the new notes that come with enhanced security features. However, ATMs will not dispense these new notes due to their size unless the machines and their cassettes are recalibrated. The new Rs 200 denomination has the motif of Sanchi Stupa on the reverse and its base colour is bright yellow while the Rs 50 note is fluorescent blue and has the stone chariot of Hampi, which is internationally recognised as the world heritage site by the Unesco.
Analysis
The printing presses at Mysore and Salboni are getting ready to print the new Rs 1,000 notes, sources said
Printing of Rs 2,000 notes stopped six months ago. Now Rs 200 notes are getting printed at these presses. Next in line are Rs 1,000 notes
