Demonetization : The Reserve Bank of India (RBI) recommended demonetization of 500- and 1,000-rupee banknotes Prime Minister Narendra Modi announced the surprise move in a televised address to the nation in the evening of November 8.
》The government and the RBI have kept the consultation process that led to the decision to demonetize 86% of India’s cash in circulation a closely-guarded secret. Both, however, have insisted that the demonetization plan had been under discussion for long and consultations were being held.
●Lets Understand what it is actually, why it is done and what will happen in our economy.
▪Monetisation refers to the conversion of an object into money, which means that it is generally accepted as a medium of exchange.
RBI- Reserve Bank of India regulates the Monetisation in India.
☆SPMCIL – Security Printing & Minting Corporation of India Limited.
Incorporated on 13th Jan 2006 under the Companies Act, 1956 will prints/mint notes, coins in India.
¤Headquarter- New Delhi
▪It is engaged in the manufacture of security paper, minting of coins, printing of currency and bank notes, non- judicial stamp papers, postage stamps, travel documents, etc.
The company has four presses, four mints and one paper mill to meet the requirements of RBI for currency notes and coins and State Governments for Non-Judicial Stamp Papers and Postal Departments for postal stationery, stamps etc. and Ministry of External Affairs for passports, visa stickers, and other travel documents.
¤Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL)
Incorporated on 3rd Feb 1995 under the Companies Act, 1956.
The company manages 2 Presses one at Mysore in Karnataka and the other at Salboni in West Bengal.
The Board of Directors headed by a non Executive Chairman nominated by Reserve Bank of India oversees the overall affairs of the Company. The Managing Director is the whole time Chief Executive of the Company and is also a member of the Board.
Currency notes are printed at the Currency Note Press in Nashik, the Bank Note Press in Dewas, the Bharatiya Reserve Bank Note Mudran (P) Ltd at Salboni and Mysore and at the Watermark Paper Manufacturing Mill in Hoshangabad. The current series of banknotes (which began in 1996) is known as the Mahatma Gandhi series.
●The presses in Madhya Pradesh and Maharashtra are owned by the Security Printing and Minting Corporation of India (SPMCIL), a wholly owned company of the Government of India. The presses in Karnataka and West Bengal are owned by the Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), a wholly owned subsidiary of the Reserve Bank.
●The new Bank Note Paper Mill India Private Limited (BNPMIPL) in Mysuru is a joint Venture between BRBNMPL and SPMCIL, with a production capacity of 12,000 million tonnes. It has commenced commercial production in 2015-16 in a significant step towards the indigenization of production of new banknotes.
●Coins are minted by the Government of India. The Reserve Bank is the agent of the Government for distribution, issue and handling of coins. Four mints are in operation: Mumbai in Maharashtra, Noida in Uttar Pradesh, Kolkata, and Hyderabad.
▪All coins that are minted in Mumbai — Diamond
▪All coins that are minted in Noida- Dot
▪All coins that are minted in Kolkata- No mark
▪All coins that are minted in Hyderabad- Star
Demonetization is the act of Banning /taking back of a currency unit of its status as legal tender.
》 What is Legal Tender?
Legal tender is any official medium of payment recognized by law that can be used to extinguish a public or private debt. It is also called as lawful money, Legal money.
》Why it is done?
Demonetization is necessary whenever there is a change of national currency. The old unit of currency must be retired and replaced with a new currency unit.
●1938- The highest denomination note ever printed by the Reserve Bank of India– Rs 10,000 note which was again printed in 1954.
●1946- Rs 10,000 note was first demonetized.
●1954– Higher denomination banknotes of Rs 1,000, Rs 5,000 and Rs 10,000 were reintroduced
● 1978- all of them were demonetized.
●1987 – Rs.500 notes came into circulation.
●2000- Rs 1000 notes came into circulation once again.
●2016- All Rs. 500 and Rs 1000 notes demonetized.
●2016- Rs. 2000 notes came into circulation for the first time.
》Till now 3 times demonetization has been done.
》While announcing currently circulated Rs 500 and Rs 1,000 notes as invalid from midnight 8 Nov, Prime Minister Narendra Modi said new Rs 500 note and a Rs. 2,000 denomination banknote will be introduced from November 10.
》Bank notes in Ashoka Pillar watermark series in Rs 10 denomination were issued between 1967 and 1992, Rs 20 in 1972 and 1975, Rs 50 in 1975 and 1981 and Rs 100 between 1967-1979.
》The banknotes issued during this period contained the symbols representing science and technology, progress and orientation to Indian art forms.
》In the year 1980, the legend Satyameva Jayate — ‘truth alone shall prevail’ — was incorporated under the national emblem for the first time.
》In October 1987, Rs 500 banknote was introduced with the portrait of Mahatma Gandhi and Ashoka Pillar watermark.
》Mahatma Gandhi (MG) series banknotes – 1996 were issued in the denominations of Rs 5, (introduced in November 2001), Rs 10 (June 1996), Rs 20 (August 2001), Rs 50 (March 1997), Rs 100 (June 1996), Rs 500 (October 1997) and Rs 1,000 (November 2000).
》The Mahatma Gandhi Series – 2005 bank notes were issued in the denomination of Rs 10, Rs 20, Rs 50, Rs 100, Rs 500 and Rs 1,000 and contained some additional/new security features as compared to the 1996 MG series.
》The Rs 50 and Rs 100 banknotes were issued in August 2005, followed by Rs 500 and Rs 1,000 denominations in October 2005 and Rs 10 and Rs 20 in April 2006 and August 2006, respectively.