With the country's Gross Domestic Product (GDP) size increasing in quantitative terms, there could be a need for more currency in the economy, a Reserve Bank of India official said today.
Following demonetization in November 2016, when the government junked high-value currency notes of denominations 500 and 1,000, there was a shrinkage in currency in the system, said the RBI official.
Government, RBI introduced Rs. 500, Rs. 2000 banknotes post demonetization
"Now, with the growth in GDP, there may be a need for more currency in the system," the RBI official commented further. Post-demonetization, the government re-introduced Rs. 500 banknote and discontinued Rs. 1,000 currency note. Meanwhile, RBI introduced banknotes of denomination 2,000 during that period.
RBI to appoint ombudsman for deposit-taking NBFCs
The official further said there has been a decline in counterfeit notes and whatever is in circulation currently is "very crude counterfeiting".
"The bank will also be issuing more security features in the currency for which pre-qualification bid notice has been floated," he added.
Regarding NBFC, another official said that RBI would appoint an ombudsman for deposit-taking NBFCs, with addition of a digital ombudsman.
Reserve Bank also pursuing national strategy on financial inclusion
The apex bank has been pursuing a national strategy on financial inclusion, the official said, and has also formed an expert committee for MSMEs to avail bank credit without much hassle.
The RBI had also started co-origination of loans with banks and NBFCs, which would help the customers in getting a better rate as the cost of bank funds would be low, he added.