To ensure a stable economy, the RBI will survey public satisfaction with banknotes and introduce new security features to prevent fraud.
In India, the Reserve Bank has been working hard to keep a steady supply of new banknotes in circulation while removing the old ones. Given the disruption caused by economic uncertainties such as demonetisation and COVID-19, it is imperative. In light of the increase of digital payments, the Reserve Bank is also interested in learning how Indians use cash. To achieve this, they have introduced a new website that will run an awareness campaign to assist people in exchanging old notes for new ones. The Reserve Bank is also conducting surveys to determine people’s happiness with banknotes and working to implement new security features to prevent fraud and counterfeiting.
What’s Happening?
Banknotes come in different denominations, from the smallest Rs 2 note to the largest Rs 2,000 note.
According to recent RBI data, the overall volume of banknotes in circulation rose from 11.59 lakh in 2020 to 13.05 lakh in 2022. The value of these currencies rose from Rs 24.21 crore in 2020 to Rs 31.05 crore in 2022.
The volume and value of the Rs 500 note increased the most, from 2.94 lakh pieces in 2020 to 4.55 lakh pieces in 2022, and the value increased from Rs 14.72 crore in 2020 to Rs 22.77 crore in 2022.
The volume and value of the Rs 2,000 note fell the most, from 27.39 lakh pieces in 2020 to 21.42 lakh pieces in 2022, and the value fell from Rs 5.47 crore in 2020 to Rs 4.28 crore in 2022.
Coins in Circulation in India
According to recent RBI data, the overall volume of coins in circulation rose from 12.18 lakh in 2020 to 12.46 lakh in 2022. The value of these coins grew as well, rising from Rs 26.30 crore in 2020 to Rs 27.97 crore in 2022.
The Rs 5 coins have the highest volume and value, increasing from 1.75 lakh pieces in 2020 to 1.84 lakh pieces in 2022, and the value rose from Rs 8.8 crore to Rs 9.21 crore in 2022.
The Rs 2 denomination is the second most circulated coin, with 3.40 lakh pieces in circulation and a value of Rs 6.81 crore in 2022.
Interestingly, the Rs 20 coin saw a significant increase in volume and value from 2021 to 2022, with a volume increase from 896 lakh pieces to 3,372 lakh pieces and a value increase from Rs 179 crores to Rs 674 crores.
Impact of Currency Circulation
Have you ever been curious about how money functions in the real world? Currency in exchange serves as the economy’s lifeblood, keeping things moving. It’s the physical cash in your wallet, in the hands of businesses, and in banks.
Why does currency in circulation matter?
Well, it helps us buy things and store value. People prefer to spend more when there is extra money around, which leads to higher prices and inflation. But when lending becomes expensive, people tend to hold onto their money and save more. This leads to decreased demand and deflation.
The Reserve Bank of India closely watches the amount of currency in circulation to ensure enough cash for everyone and stabilise prices.
What’s Next?
Although India is moving towards digital payments, physical cash is still necessary, especially for small companies and individuals. Financial inclusion and increased access to banking services may boost cash demand. The exact trajectory of India’s currency in circulation is challenging to predict, but a mix of digital and physical payment methods is likely to persist. The RBI will manage the currency supply and embrace technology to enhance the efficiency and security of the payment system.
