The RBI’s staff body has flagged a shortage of small denomination notes

The All-India Reserve Bank Employees Association (AIRBEA) has noted an acute shortage of small denomination notes in many parts of the country, especially in semi-urban and rural areas, and has urged the RBI to take corrective measures. | Photo credit: KV SRINIVASAN

Semi-urban and rural areas are the worst affected in this regard. That this has to happen at a time when money circulation is returning to the public despite negative incentives is unfortunate, Ghosh said.

RBI action needed

The RBI should take steps to circulate sufficient quantity of small denomination notes through the counters of the commercial banks and through its own counters. Small denomination coins must also be circulated through various points of sale. RBI offices should ideally organize ‘coin melas’ as before, not only in cities but also in urban and rural areas, in consultation/coordination with panchayats, cooperatives, regional rural banks and self-help groups.

Digital transactions

One of the fundamental functions of the Central Bank is to issue banknotes of different denominations and coins to the public when necessary. The RBI’s currency management is necessary to address this, and the RBI has developed several systems and mechanisms over time, including promoting digital transactions in recent years. Going digital reduces dependence on paper money and coins, while increasing the number of transactions and limiting the resort to fake money.

ATMs don’t help

While there is no visible shortage of higher denomination notes, namely ₹100, ₹200 and ₹500, small denomination notes are virtually unavailable. ATMs only dispense higher denomination banknotes; there is no provision for small denominations. Even commercial bank branches are pleading the inability to supply ₹10, ₹20 and ₹50 notes required for daily small transactions.

Countless complains

Print and social media channels are full of complaints about this. The RBI has often floated the idea of ​​replacing small denominations with metal coins that are more durable than paper money but use the country’s scarce metal resources. Considering the emerging context, the common man is forced to buy small currency notes at a premium from illegal sellers, Ghosh added.

Published on December 17, 2025