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The Reserve Bank of India (RBI) on Friday said it would soon put in circulation currency notes with the denomination of Re 1. The notes will be printed by the Government of India.
The RBI Act confers upon the central bank the right to issue notes of all dominations, except Re 1. Such notes are issued by the government and bears the signature of the finance secretary. All other notes of different denominations are signed by the RBI governor.
The Government of India also has the sole right to mint coins of all denominations.
The central bank has been gradually withdrawing lower denomination notes as the perceived benefit is lesser than the cost of printing such notes.
Banking sector experts have termed the move to restart printing of notes as more of a symbolic gesture, as Re 1 coins are expected to be more in circulation.
According to the RBI Annual Report for 2013-14, there were 38,424 million pieces of Re 1 coins in circulation (March 2014) and had seen a 7.07 per cent growth in volumes compared to March 2013.
Its percentage share was 41.9 per cent of coins in the circulation space, that includes small coins, and those coins with denominations of Re 2, Re 5 and Re 10.
Here, Re 1 coins had seen the lowest growth in volumes compared to the other denominations (excluding small coins) in March 2014 compared to March 2013. Its percentage share has also come down gradually from March 2012.
RBI in its release on Friday said these currency notes (of Re 1) are legal tender as provided in The Coinage Act, 2011. It said the existing currency notes in this denomination in circulation will also continue to be legal tender.
The RBI Act confers upon the central bank the right to issue notes of all dominations, except Re 1. Such notes are issued by the government and bears the signature of the finance secretary. All other notes of different denominations are signed by the RBI governor.
The Government of India also has the sole right to mint coins of all denominations.
The central bank has been gradually withdrawing lower denomination notes as the perceived benefit is lesser than the cost of printing such notes.
Banking sector experts have termed the move to restart printing of notes as more of a symbolic gesture, as Re 1 coins are expected to be more in circulation.
According to the RBI Annual Report for 2013-14, there were 38,424 million pieces of Re 1 coins in circulation (March 2014) and had seen a 7.07 per cent growth in volumes compared to March 2013.
Its percentage share was 41.9 per cent of coins in the circulation space, that includes small coins, and those coins with denominations of Re 2, Re 5 and Re 10.
Here, Re 1 coins had seen the lowest growth in volumes compared to the other denominations (excluding small coins) in March 2014 compared to March 2013. Its percentage share has also come down gradually from March 2012.
RBI in its release on Friday said these currency notes (of Re 1) are legal tender as provided in The Coinage Act, 2011. It said the existing currency notes in this denomination in circulation will also continue to be legal tender.
While the Reserve Bank of India (RBI) has the authority to issue bank notes of denominational values of Rs. 2, Rs. 5, Rs. 10, Rs. 20, Rs. 50, Rs. 100, Rs. 500, Rs. 1,000, Rs. 5,000 and Rs. 10,000, the one rupee note was printed and issued by the central government.
The Government of India also has the sole right to mint coins of all denominations.
