Breaking News

True Facts:The capacity of Indian Currency Printing Presses and the replacement time needed


The capacity of currency printing presses and the replacement time needed clarified.

As a reader, we have the habit of getting panicked with sensational headlines that media puts up, without giving much thought to the depth of the matter. On the other hand the paid media houses do not leave the last attempt to present news in spicy words. The question is “do we really need to panic if the Govt. may take 6-7 months to replace the old currency notes ?” Know how much worth is your restlessness.

India uses around 22,000 metric tons (MT) of special papers, inks, security features with specialised facilities every year and that accounts for at least 40% of the total cost of manufacturing money. For the year ended June 2016, the Reserve Bank of India (RBI) supplied 21.2 billion banknotes and printing costs came to around Rs3,421 crore($502 million).

That high cost is likely one of the reasons prime minister Narendra Modi was keen to include India’s currency in his “Make in India” project, putting an end to outsourcing. In 2015, he urged RBI to start producing more of the required paper and ink, with the eventual goal of keeping the entire production process within the country.

This week, Indians are gradually getting their hands on the new Rs500 and Rs2,000 notes produced at RBI’s press in Mysuru, Karnataka. What’s interesting is that part of the paper used to make them was produced in India, though RBI refused to reveal exactly how much.
This paves the way for India to eventually become self-sufficient in producing all its currency notes, an important milestone that comes nearly 90 years after the country first began printing its own paper money.

Following the demonetization of the Rs 500 and Rs 1000 notes by the government, there have been long queues in front of banks & ATMs to exchange and deposit the old notes. It might take quite some while for the supply of the new Rs 500 and Rs 2000 notes to match the demand.  But what is the capacity of our currency printing presses?

The process involved in Printing of Currency notes

The Reserve Bank of India (RBI) places indent for banknotes with various printing presses on the basis of an econometric model factoring in the real GDP growth prospects, rate of inflation and denomination-wise disposal rate of soiled notes. Four printing presses print and supply banknotes. These are at Dewas in Madhya Pradesh, Nasik in Maharashtra, Mysore in Karnataka, and Salboni in West Bengal.

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.

The RBI oversees the currency management in the country including supply & distribution. The RBI also ensures that the clean bank notes are in circulation by continuous supply of clean notes and timely withdrawal of soiled notes.

This is achieved through a wide network of more than 4000 currency chests  and more than 3700 coin depots. Currency chests are extended arms of the Reserve Bank Issue Departments and are responsible for meeting the currency requirements of their respective regions.

Rs 500 & Rs 1000 notes make up for 25% by volume & 86% by value 

Of the various bank notes in circulation, Rs 10 notes have made up for more than 1/3rd by volume for each of the last 5 years. From 33% by the end of 2011-12, the proportion of Rs 10 notes by volume reached 35.5% by the end of 2015-16. Rs 2 and Rs 5 notes made up for 13% of the notes by volume by the end of 2015-16.

The proportion of the Rs 100 note in circulation by volume has come down from 20.3% by the end of 2011-12 to 17.5% by the end of 2015-16. During the same period, the proportion of Rs 500 note by volume increased from 14.8% to 17.4%. The proportion of Rs 1000 note also increased from 5% by the end of 2011-12 to 7% by the end of 2015-16. By the end of 2015-16, Rs 500 and Rs 1000 notes made up for a quarter of all the notes in circulation by volume, around 22 billion pieces.


In terms of value, Rs 500 & Rs 1000 notes made up for more than 86% of the notes in circulation, which is more than 14 Trillion rupees (14 lakh crore rupees).

21 billion bank notes were printed in 2015-16

The supply of bank notes increased from 17.5 billion pieces in 2011-12 to 21.2 billion pieces in 2015-16, an increase of around 20%. The supply of bank notes decreased by around 10% in 2015-16 compared to 2014-15.


The presses supplied around 6 billion pieces of Rs 500 and Rs 1000 in 2014-15 and 5 billion pieces in 2015-16. In 2016-17, the original indent for Rs 500 and Rs 1000 notes was around 8 billion. If the entire printing capacity is pressed into action, then it might be possible to produce around 23 billion pieces a year (inclusive of all denominations). But with Rs 500 and Rs 1000 alone accounting for 22 billion notes in circulation, it might not be possible to meet the demand for new Rs 500 and Rs 2000 in the short term.

Information sources: RBI, QZ, Factly, TOI. Featured image is a representational image only.


Media houses are reporting that it may take 6-7 months to replace all the old currency notes of Rs.500 & 1000 with the new currency notes of Rs.500 & 2000.

However, a few questions that may bring clarity to your own question that “should I wait 6-7 months to replace all my old currency ?”

Straight facts:-

  1. The total replacement time of 6-7 months may be for printing 14 lakh crores in total. If you already got some cash from ATMs or say you may get after re-calibration of ATMs in next few days, that means some 10-20% printing has already been done.
  2. To be noted that printed notes may not be reaching you due to incomplete re-calibration job yet, which is more time taking than re-filling ATMs just like that. So, even if the notes are available with banks, the ATMs may not be re-configured for the new note slots.
  3. The total replacement currency includes 2 parts of money – one that is released by RBI into the public & another part which is reserved by RBI in the form of certain Bank deposits. For example, you cannot withdraw your Fixed deposits, etc. Such currency is also counted as Cash Circulation
  4. Further, would you be using all the currency held with you or your entire monthly earning all at once in a single day or week ? Hope your answer is No. Exactly. So, with the new currency notes getting available from time to time and the public withdraws it from ATMs as and when required for daily needs or expenses.
  5. Non-working ATMs, cash unavailability may definitely be tough to manage expenses, which is understood. But do you really need to worry about the replacement time of 6-7 months in case the Govt. needs so much time ?
  6. The volume of transactions via mobile banking has doubled, going up from 171.92 million in 2014-15 to 390 million in 2015-16, as per an RBI estimate. Transactions of m-wallet – a mobile phone app that allows cashless transactions – too have witnessed a jump in volume, touching 604 million compared to 255 million in 2014-15. – See more at: 

Kindly explain and educate the needy. Let us not panic or create panic and support a move that is sure to help make the economy of our country better & stronger. Note that, big business tycoons & multi-billionaires such as Bill Gates have supported the currency ban move, including the support from chief of World Bank. Any words of support or appreciation of the move from such great institutions on individuals is a right sign. They wouldn’t have been billionaires with high valued companies without an understanding of how economies run.

Facebook Auto Publish Powered By :