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Printing new currency will cost more to RBI
Posted on: 09/Nov/2016 1:08:00 PM
Currency notes of Rs.500 and Rs.1000 denominations will not be legal tender beginning November 9. This was announced by Prime Minister Narendra Modi in a special address to the nation on Tuesday evening.
Replacing all the Rs. 500 and Rs. 1,000 denomination notes with other denominations, as ordered by the government, could cost the Reserve Bank of India at least Rs. 12,000 crore, based on the number of notes in circulation and the cost incurred in printing them.
It costs Rs. 2.50 to print each Rs. 500 denomination note, and Rs. 3.17 to print a Rs. 1,000 note. Assuming that the new Rs. 500 notes cost the same to print, then that is an additional Rs. 3,917 crore spent in simply maintaining the same number of notes in circulation.
The new Rs. 2,000 notes are likely to cost about the same or a little more than the Rs. 1,000 notes, which means an additional cost of Rs. 2,000 crore to print them.
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