The evening of November 8th shocked the entire nation when in a public meeting PM Narendra Modi announced demonetization of ₹1000 and ₹500 notes completely. Another surprise is being planned by RBI, according to two people in the RBI board who were aware of the development, India’s apex bank has now cleared a proposal to introduce new notes of ₹200 denomination. The decision was taken in RBI board meeting in March.
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As of now, no information about this has been shared by any official person from RBI. Printing of the new notes will start from June, once the approval from the government will come. While ₹17.9 trillion were in circulation prior to demonetization, as of 24th March, the amount stands at ₹13.12 trillion.
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While the government may not increase the currency in circulation to match pre-demonetisation levels to encourage online payments, it might still need to increase it a little as there are many ATMs still running dry in the nation. Moreover, in a nation where the internet is still a luxury and literacy rates are poor in most rural areas, online transactions are easily said than done.