RBI’s FAQs on Indian Currency Banknotes

RBI’s FAQs on Indian Currency Banknotes provides concise explanations about the meaning behind the “I promise to pay” clause on banknotes, the denominations currently in circulation or the intriguing history of high-denomination notes, etc., without losing the essential intent and meaning.

What does the “I promise to pay” clause on banknotes mean?

The “I promise to pay” clause on banknotes signifies the Reserve Bank of India’s (RBI) obligation to pay the value of the banknote to the bearer on demand. The RBI is the issuer and is responsible for honoring the value stated on the banknote.

RBI's FAQs on Indian Currency Banknotes

Which denominations of banknotes are currently in circulation?

Currently, the banknotes in India are issued in denominations of ₹10, ₹20, ₹50, ₹100, ₹200, ₹500 and ₹2000. The denominations of ₹2 and ₹5 have been discontinued as coins were found to be more cost-effective. However, previously issued ₹2 and ₹5 banknotes are still legal tender. ₹1 notes issued by the Government of India are also legal tender.

Can banknotes be issued in denominations other than those mentioned above?

Yes, the Reserve Bank of India Act allows for banknotes to be of various denominations, including values not exceeding ten thousand rupees, as specified by the Central Government based on the recommendations of the RBI’s Central Board.

What was the highest denomination note ever printed in India?

The highest denomination note ever printed in India was the ₹10,000 note in 1938, which was demonetized in January 1946. It was reintroduced in 1954 and demonetized again in 1978.

What material is used for Indian banknote paper?

Indian banknotes are currently printed on paper made from 100% cotton.

How many languages appear on Indian banknotes?

Indian banknotes feature fifteen languages in the language panel, with Hindi prominently displayed in the center and English on the reverse side.

Is it possible to have two or more banknotes with the same serial number?

Yes, it is possible to have banknotes with the same serial number, but they would have a different Inset Letter, year of printing or the signature of a different RBI Governor. The Inset Letter is an alphabet printed on the banknote’s Number Panel.

What is non-sequential numbering?

Non-sequential numbering was introduced in 2011 for banknote printing to improve efficiency and cost-effectiveness. It means that packets of banknotes contain 100 notes that are not sequentially numbered.

What is a “star series” banknote?

The “star series” banknotes are introduced when there is a need to replace defectively printed banknotes in a packet of 100 serially numbered banknotes. These star series notes are identical to regular banknotes but have an additional *(star) character in the number panel.

Who decides the design and figure to be printed on a new banknote?

The Central Government approves the design, form and material of banknotes based on recommendations made by the Central Board of the Reserve Bank of India (RBI).

How is the volume and value of banknotes to be printed determined?

The volume and value of banknotes to be printed in a year depend on factors such as the expected increase in Notes in Circulation (NIC) to meet public demand and replacing soiled/mutilated notes. Statistical models consider factors like GDP growth, inflation, interest rates and non-cash payment growth. The RBI estimates the volume and value of notes based on these factors and feedback from Regional Offices and banks, in addition to consulations with the Government of India and printing presses.

Are the banknotes issued by RBI backed by any assets like gold?

Yes, all banknotes issued by the RBI are backed by assets such as gold, Government Securities and Foreign Currency Assets, as defined in the RBI Act, 1934.

We hope this FAQ guide has shed light on the intricacies of Indian banknotes by covering most of the relevant questions. From understanding the significance of the “I promise to pay” clause to exploring the various denominations and historical aspects, the world of banknotes holds fascinating insights.

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