Yes, Rs 200 notes may be issued next month. No, Rs 2000 notes will not be banned

Minister of State for Finance Santosh Kumar Gangwar has stated that Rs 200 notes will be in circulation soon. The Reserve Bank of India, as reports suggest, has already begun printing the new notes.

The Rs 200 note is meant to sort out difficulties in transactions while using the new Rs 2000 notes and due to lack of sufficient Rs 500 and Rs 100 notes

Even the largest commercial bank of the nation, State Bank of India , has praised the move to release new Rs 200 notes calling it the 'missing middle'.

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The note could be released in the month of August, news agency IANS reported while quoting anonymous government sources.

"The paper for Rs 200 notes was ready in the Mysuru paper mill in June. It should be in circulation next month," IANS reported.

The Mysuru paper mill is jointly run by Bharatiya Reserve Bank Note Mudran, a RBI subsidiary which prints currency notes, and Security Printing and Minting Corp of India Ltd (SMPCIL), which is a public sector unit.

Along with this, Gangwar established that there is no news yet stating that the Rs 2000 will be taken out of circulation. The central bank recently stopped printing new Rs 2000 notes, as per reports.

"No news that Rs 2,000 will be scrapped," IANS reported Gangwar saying.

Gangwar further added, "The reduction in printing of new Rs 2,000 notes is a separate issue. But that needs to be confirmed by the Reserve Bank of India (RBI). RBI will give information on Rs 2,000 notes."

Opposition had questioned Finance Minister Arun Jaitley in Parliament earlier this week, asking him to confirm if the government was going to "demonetise Rs 2,000 notes" and whether it would not be printed in future, which Jaitley did not answer.

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It has been speculated that government has no intention to demonetise Rs 2000 notes. Printing Rs 2000 notes has been discontinued to limit their circulation but they will remain legal tender.

This had been the plan even when they were brought into circulation at the time of demonetisation of Rs 500 and Rs 1000 notes back in November last year. The Rs 2000 were meant to expedite the remonetisation process and their circulation was to be restricted after this purpose was fulfilled.

According to a SBI Ecowrap report, the economy is nearing complete remonetisation as circulation of new currency notes reached 84 per cent of the devalued ones on July 7. The total value of old high denomination notes of Rs 500 and Rs 1000 was Rs 15.44 lakh crores on November 8, the day Narendra Modi government announced their demonetisation.

The gap created by limited circulation of Rs 2000 notes is likely to be filled by smaller denomination currency notes of Rs 200.

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