Reserve Bank of India announced that it would issue a new 100-rupee note on 19th July.
since demonetization five new banknotes have been introduced – 10 rupees, 50 rupees, 200 rupees, 500 rupees and 2000 rupees.
Although, the new 100-rupee note in comparison with an original note would be more expensive because its size and color are different.
For this reason, banks will need to modify their ATMs.
Change is the only constant thing in the world and after effects of demonetization led this phrase true as five new banknotes have been introduced since November 8th, 2016 – 10 rupees, 50 rupees, 200 rupees (which didn’t have an earlier version), 500 rupees and 2000 rupees – an unprecedented amount. And on July 19th, the Reserve Bank of India announced the introduction of a new lavender-colored 100-rupee note.
Introducing a new note to the economy doesn’t come cheap. The RBI annual report confirms that the cost of printing of currency notes more than doubled to Rs 7,965 crore in 2016-17 from Rs 3,421 crore in the previous year on account of new currency printing, as per PTI.
A filing under the Right to Information Act in December 2016 revealed that approximate cost of printing each note of new Rs 500 is in the range of Rs 2.87 to Rs 3.09, and Rs 3.54 to Rs 3.77 for Rs 2000,
The government had already stopped printing 2000 – rupee note last year, the government made a push towards promoting lower value notes instead, starting with the introduction of the 200-rupee note.
Other than printing expenses, there are a number of other costs of introducing new notes. ATMs need to be restocked, new notes need to be transferred to the government’s issue offices and currency chests/treasuries and banks need to upgrade their note processing systems.
However, the introduction of the new 100-rupee note is expected to be more expensive than other notes, relative to their original versions, owing to its size. The dimensions of the note are different from the original 100-rupee note as well as the 200-rupee note.
This will lead to an additional cost – the cost of recalibrating ATMs to adjust to the note’s specifications. This is expected to cost a cumulative total of ₹100 crore alone. However, this expense will not be borne by the government, but by the country’s banks and ATM operators.
The banks already had to modify their ATMs in January 2018 when the 200-rupee note was released. This happened despite their demand on waiting till the new 100-rupee note was introduced. now they have to adjust ATMs spacing system again.
The recalibration process involves the installation of spacing systems to separate the notes. These systems are programmed in accordance with the size of each note. A note with completely new dimensions requires an adjustment to these spacers.
Not sure as of now that the new 100-rupee note would be the last note to be introduced by the current government. The RBI is reported to be in the process of developing a new 1000-rupee note. Once it is introduced and the short-term adjustment to the new note concludes, Indian banks and ATM operators will finally be able to rest easy for a while.