In a step that will address the present currency chaos, the Government today launched new Rs 500 notes. Previously, it was the most sought currency note. This step is expected to facilitate monetization as the new Rs 2000 notes seems to be awkward solution in meeting transaction needs of the people. The Rs 500 denomination was the largest component of the previous currency system as it constituted to nearly 48% value of the notes circulated.
Non-issue of the new Rs 500 and Rs 1000 notes proved to be the main defect of the demonetization drive. It has created liquidity shocks in the system and currency chaos. Non-issue of these two most sought notes felt that demonetization was hastily prepared one without quality thinking.
In the previous format, there were 15707 million units. But reports indicate that the four presses together may print 2000 million notes by the end of the year.
New Rs 500 notes were printed at the two presses owned by the RBI and another two presses owned by the government. For the RBI, the Bharatiya Reserve Bank Note Mudran Pvt. Ltd. (BRBNMPL), a wholly owned subsidiary of the Reserve Bank, owns both presses at Mysore in Karnataka and Salboni in West Bengal.
New Rs 500 notes are also printed at presses of Government owned Security Printing and Minting Corporation of India Limited (SPMCIL) at Nashik, Maharashtra and Dewas, Madhya Pradesh.
Currency Note Press (CNP), Nashik is estimated to be already supplied 10 Million Rs 500 notes.
Press reports indicate that CNP has been given a target of 400 million pieces of the Rs 500 note by the end of the current financial year.