Cost of Printing 200 and 500 and 2000 Rupees Notes in India

The cost of printing currency notes of denomination 500, 2000 has diminished, while printing of 10, 20, and 100 have increased. According to a statement released by Currency Note Press (a division of Security Printing and Minting Corporation of India), the cost of printing 200, 500 and 2000 rupee notes in India is Rs.2.93, Rs.2.94, Rs.3.54, respectively. The price was effective for 2019-2020. The printing cost has come down from previous years due to lower input costs and demand.

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Fig: 500 Rupees Notes

The Reserve Bank of India is the only authorised body to print and circulate currency notes. Except for one rupee currency note, RBI has the right to print currency notes of all denominations. The Ministry of Finance has the sole right to print one rupee note and mint coins of all denominations. After printing one rupee note and minting coins, the Ministry of Finance assigns it to RBI for circulation.

Indent and Supply 

As per an annual report published by RBI for FY2020, the order for printing of Rs 500 currency note was 1,463 core quantities, but supplied by printing organisations were 1,200 crore pieces. The indent for 50 currency notes was 240 crore pieces, but actual printing was 234 crore pieces. The report also states the indent for currency printing in India was 13.1% lesser than the preceding year. During 2019-2020 the printing of currency notes was lower by 23.3% than the previous year due to pandemic Covid-19 and subsequent lockdown.

The Minimum Reserve System

The Minimum Reserve System is the method for determining the quantity of currency printing in India. As per the norm, RBI must maintain a bare minimum of 200 crores, constituting Rs85 crore as foreign currency and Rs115 crore as a gold reserve. With this stated reserve RBI can print as many currency notes as required by the economy. The note printing in India quantity and value depends on various factors like Notes in Circulation (NIC). Replacing soiled, mutilated notes is another reason for new note printing in India. 

Factors Affecting NIC

The estimated increase in NIC is due to expansive GDP, inflation, interest rate, growth in digital mode payment, and other macroeconomic factors. The average lifespan of currency notes and notes already in circulation decides the quantity of currency printing in India. Viewpoints from RBI regional office and other banks also persuade India's value and volume of note printing. The final decision is made under the central government.

To facilitate demonetization RBI printed a considerable quantity of 200,500 and 2000 notes. The cost of printing 200, 500, 2000 rupee notes in India increased during 2016-2017 for this reason. The amount allotted on printing new note printing in India was Rs7, 965 crores from July 2016 to June 2017. The amount was 133% higher than the previous year, reducing 54% of the Central Government's profit. A statement regarding demonetization was given on the floor of Lok Sabha on 18th December 2017. 1,695.7 crore of new 500 notes were printed till 8th December 2017. A statement was also issued about the cost of printing new notes of other denominations.

Currency Printing Presses

Indian currency printing places are four; two under Security Printing and Minting Corporation of India Limited (SPMCIL), a state-owned Schedule "A" company under the supervision of the Government of India, and two under Bharatiya Reserve Bank Note Mudran Private Limited. Besides minting coins and printing currency notes, non-judicial stamp paper, security papers, and postage stamps are also printed in these printing presses. 

DCM

The Department of Currency Management supervises and controls currency management according to the Reserve Bank of India Act, 1934. The department's function relates to new currency notes and coins and retrieving soiled, mutilated notes from circulation. There are eighteen issue offices of RBI, four thousand one hundred ninety–five currency vaults, four hundred eighty-eight repositories, and three thousand five hundred sixty-two small coin depositories administered by government treasuries and banks to facilitate the operation.

Chief General Manager controls the Department of Currency Management (DCM). The department has many divisions: planning and resource management, data analysis, note exchange, security, and discipline counterfeit note vigilance. 

Many citizens ask where currency notes are printed in India. There are four printing presses from where new currencies are assigned to DCM. Two are owned by Bharatiya Reserve Bank Note Mudran Private Limited (BRBNML), located at Nasik (Western India), and Dewas (Central India). The other two currency printing presses are situated at Mysore (South India) and Salboni (Eastern India). In addition, coins are minted at Kolkata, Mumbai, Hyderabad, and Noida; the Government of India owns all these mints.

BRBNML and SPMCIL

BRBNML and SPMCIL control the money factory in India, the first is a subsidiary company of RBI, and the Government of India owns the second. At the same time, DMI is responsible for designing currency notes, estimating demand for notes and coins. The department facilitates the seamless distribution of notes and coins all through the country and repossesses ailing notes and ancient coins that are outdated now.

As per supposition by RBI, the number of forged currency notes increased by 20% in FY2017, amounting to 7.62 lakhs. The most counterfeit notes were of 500-2000 denominations. DMI has designed many security features to stop bogus, security thread, watermark, latent image, identification mark, and intaglio printing. With all these features, the cost of printing one note of 200 is Rs2.93. The cost of printing a 2000 rupee note is Rs 3.54, and that of one 500 currency note is Rs2.93. It is worth mentioning; the government prohibited 1000 currency notes during demonetisation in 2016and introduced a new 2000 currency note in its place. 

It is essential to understand the cost of making 2000 rupee notes, and other denominations consist of the price of paper, ink, safety threads, and state-of-the-art printing machines. RBI imports the currency paper and ink, so the price varies according to foreign exchange. Italy (5,363.3 tonnes), Switzerland (4,246.1 tonnes) are two major suppliers of documents used for currency notes as of 2017. There are two factories producing paper on which currency is printed. One is situated at Hoshangabad (Madhya Pradesh), other is at Mysore (Karnataka). The former is run by the Government of India, latter by RBI. The Hoshangabad factory was established in 1967 with eight billion note pieces, and the Mysore one was initiated in 2015, with around sixteen billion note pieces. Hope this article helped you understand the cost of printing 200, 500 and 2000 rupee note in India.