Finshots Daily India wants more lower denomination notes?
Jun 5, 2025
The government is considering rolling out more lower denomination notes. This move could significantly impact the economy and consumer behavior. Rumors about withdrawing 500 rupee notes are also unpacked, clarifying the Reserve Bank of India's position. The discussion delves into the implications for cash flow and how it may affect everyday transactions. Get ready for a deep dive into currency strategies and their effects on your wallet!
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No Demonization, Just Small Notes Push
- RBI directives to increase 100 and 200 rupee notes in ATMs sparked rumors but no demonetization is planned.
- This move signals a policy tilt toward smaller denomination notes rather than phasing out 500 rupee notes.
500 Rupee Note Faces Challenges
- The 500 rupee note remains dominant, making up 40% of notes and 86% of currency value.
- However, rising counterfeits of 500 rupee notes present challenges for RBI and black money control.
High Costs of Small Notes
- Smaller denomination notes require more printing due to higher volume and faster wear.
- The RBI's currency printing costs have sharply increased, impacting its budget.