Speculative image of the new Rs200 note that is making the rounds on social media. Photo: indiayoday

India’s Finance Ministry on Wednesday announced that it is introducing a Rs200 note, according to media sources.

The move, which follows the demonetization of the old Rs500 and Rs1,000 notes last December, is intended to reduce the gap between the Rs100 and Rs500 denominations.

“The central government hereby specifies the denomination of banknotes of the value of 200 rupees,” said a Gazette notification. The notification was issued under Section 24 of the Reserve Bank of India Act, 1934, and on the recommendation of the Central Board of Directors of the RBI.

Minister of State for Finance Santosh Kumar Gangwar told IANS that the Rs200 note, the printing of which has begun, will be in circulation soon.

NDTV noted that the move will help fill the vast demand for cash after the notes ban, which eliminated over 85% of the cash in circulation. Its report quoted Finance Ministry sources as saying that the new notes, which are being printed at a government press in Mysuru, will help to improve liquidity.

Meanwhile, the government is also introducing a new Rs50 note, but the existing Rs50 notes will continue to serve as legal tender.