Rising demand for 500, 1,000 denominations

Rising demand for 500, 1,000 denominations

Mumbai, 9 September A booming economy has significantly pushed up the appetite for notes of 500 and 1,000 denominations, even as the cost of printing currency has doubled to more than 2,000 crore during 2006-07.

“While the volume 500 denomination notes increased by 23.6% during 2006-07 (19.4 per cent a year ago), that of 1,000 denomination notes rose by 45.7% (52.7 % a year ago)," said the RBI annual report.

In the backdrop of economy recording more than 9% gross domestic product (GDP) growth rate during the last two years, the number of 500 denomination currency notes in circulation went up from 364.7 crore as on March 2006 to 450.8 crore towards the end of 2006-07.

The volume of 1,000 notes increased from 4.3 crore to 3.7 crore at the end of March 2007.

Out of the total value of currency in circulation ( 4,96,138 crore), more than 45% is in the form of 500 notes, followed by 100 (27%) and 1,000 (19%).

On the other hand, the volumes of notes of 20, 50 and 100 denominations have remained static during 2006-07, reflecting public preference for notes of higher values.

The volumes of notes of lesser denominations such 2 notes and 5 notes which are on the way out have declined further suggesting an erosion in the value of currency.

As far as notes 10 denomination are concerned, the RBI report has pointed out the volume increased by 14% during 2006-07 mainly on account of the efforts of the central bank to pump in more fresh bank notes into circulation to bring about an improvement in quality of these bank notes.