RBI to recall 15% of notes

Source: Reuters

The Reserve Bank of India (RBI), as part of its 'clean note policy' drive, will withdraw 10-15 per cent of the currency notes in circulation and inject an equivalent quantum of mint-fresh notes every year, according to a senior central bank official.

"Of the 41 billion notes in circulation, around 10-15 per cent of the soiled notes (around 12 billion) will be recalled every year and fresh notes will be issued," said M P Kothari, regional director, RBI.

The RBI, in the last one-and-a-half years, has in fact withdrawn 18 billion soiled notes even as it is seeking to increase the life of notes. The average life of a smaller denomination note is estimated to be only around 1.5 years. He said that attempts were being made to increase the circulation of higher denomination notes.

"The purchasing power of lower denomination notes is coming down due to inflation. Instead of having 100 notes of 10 rupee denomination in circulation, it would be more manageable if only one thousand rupee note is in circulation," Kothari said at function to kick off the exchange of old notes at Bank of India's Ghatkopar branch.

RBI, through the 27 public sector bank branches, was making efforts to infuse fresh notes under the 'clean note policy' drive.