Although the world is moving towards a fully digital ecosystem, currency notes and coins continue to be widely used. It may take several years to completely replace physical currency notes with digital currency. As everything produced on this planet has a cost associated with it, we often wonder how much does it cost to print currency notes. For answers, let’s take a quick look at production cost of US dollars of various denominations.
$1 and $2 – Per note cost of printing $1 and $2 currency notes is 6.2 cents. If one million $1 and $2 notes are to be printed, the cost will be $62,000.
$5 and $10 – Per unit cost of printing $5 and $10 notes is 10.8 cents. For a million such notes, The total cost will be $108,000.
$20 – Per unit cost of printing $20 note is 11.2 cents. A million $20 notes will cost $112,000.
$50 – Per unit cost of printing $50 note is 11 cents. For a million, the cost will be $110,000.
$100 – Per unit cost of printing $100 note is 14 cents. To print one million notes, The total cost will be $140,000.
These numbers indicate the real value of currency that you have. The cost of printing currency includes various expenses such as banknote development, currency paper cost, fixed and variable printing cost, transportation cost, etc.
Advanced machinery is used in production of currency notes, which entails expenses in their repair and maintenance. Moreover, all the people involved in currency production need to be paid salaries. All these costs are factored in to calculate the cost of printing currency notes.
The numbers above reveal another interesting aspect, as to why certain currency notes are more expensive to print. It may be due to multiple factors, such as overall quantity of printed notes. As cost includes both fixed and variable components, cost will depend on the total quantity of notes printed.
Another reason could be the level of security features embedded in the note. For example, the $100 note has a lot more security features in comparison to $1 and $2 notes. To give you an idea, $100 note has security features such as raised printing, micro printing, special paper with red and blue security fibers, federal Reserve system seal, treasury seal, gold numeral 100, symbols of freedom and portrait of Benjamin Franklin.
Enhanced security features make it difficult for counterfeiters to produce original looking currency. As printing fake currency is expensive even for counterfeiters, they usually choose to print higher denomination currency notes. That’s why $20, $50 and $100 currency notes have higher number of security features. The US dollar is accepted globally, which makes it all the more important to make it safe and secure.
HIGHLIGHTS
Printing of new Rs 500 note costs 52 paise less than printing old Rs 500 note
New Rs 500 note printed at a cost of Rs 2.57
The Rs 2,000 note printed at a cost of Rs 4.18
Do you know how much it costs to print Indian currency notes? Through an RTI query, India Today tried to find out how much does it cost to print different currency notes.
Here Is what we found out:
The government of India spends Rs 4.18 on each Rs 2,000 note. The cost of printing of each Rs 500 note is Rs 2.57 and for Rs 100 note it is Rs 1.51.
While for each Rs 10 note the cost incurred by the government is Rs 1.01. Interestingly, the Rs 20 note is 1 paisa cheaper than the Rs 10 note.
Denomination Price Per A Thousand pieces (in Rs) Price per Note (in Rs)
Rs 10 1010 1.01
Rs 20 1000 1
Rs 50 1010 1.01
Rs 100 1510 1.51
Rs 500 2570 2.57
Rs 2000 4180 4.18
We also tried to find out the difference between the costs of printing old demonetized notes and the new Rs 500 and Rs 2,000 notes.
The RTI revealed that it took Rs 3.09 to print the old Rs 500 note, which means the new Rs 500 note is 52 paise cheaper than the old Rs 500 note.
Denomination Price Per a Thousand pieces (in Rs) Price per Note (in Rs)
Rs 500 3090 3.09
Rs 1000 3540 3.54
What is the cost of printing 200, 500 and 2000 rupees notes in India?
The Reserve Bank of India (RBI) prints currency notes of all denominations except one rupee note. In its annual report, the Reserve Bank has stated that the cost of printing a note of 200 rupees is Rs.2.93, printing cost of 500 rupee note is Rs. 2.94 and printing of a 2000 rupee note cost Rs.3.54.
In India, the printing of new notes is the sole right of the Reserve Bank of India (RBI).RBI prints currency notes of all denomination except one rupee note. All the one rupee notes are printed under the supervision of the Ministry of Finance and signed by the finance secretary, not by the governor of the RBI.
The Finance Ministry is responsible for printing one rupee notes and minting of coins of all denomination. It is worth to mention that only the Reserve Bank of India has the right to circulate both notes and coins in the country. It means that the Ministry of Finance prints one rupee notes and mints all coins and passes them to the Reserve Bank for their circulation in the economy.
Maximum how many notes can be printed by the RBI
How many notes will be printed in India by R.B.I.; is decided on the basis of the Minimum Reserve System. This system is working in India since 1957. According to this system, R.B.I. has to keep property worth Rs. 200 CR; which comprises gold reserves of Rs.115 and foreign currency of worth Rs.85 CR. After securing this much money now the RBI is free to print indefinite currency as per the requirement of the economy.
It is precious to mention that after the demonetization in India, the RBI printed new notes of Rs.200, Rs.500 and Rs. 2000 in large numbers. Due to demonetisation the total printing cost of the RBI increased significantly in the year 2016-17. The annual report of the Reserve Bank says that it has spent Rs.7,965 CR. on printing of new notes between July 2016 and June 2017, which is 133% higher than last year's expenditure of Rs.3,420 CR. The result of this is that the profit transferred to the central government from the RBI decreased by 54%.
The central government has given information in the Lok Sabha on December 18, 2017. In a written reply from the government, Minister of State for Finance P. Radhakrishnan said that after the demonetization a total of 1,695.7 CR. new notes of 500 rupees have been printed till December 8, 2017. The government has also given information about the printing cost of notes Rs. 2000 and Rs. 200 and total expenditure occurred on them.
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After this much information, now the question arises in the mind that how much money is spent in the printing of these currency notes, or what is the cost of printing a note in India?
Let's know what the cost of printing of notes :
1. Printing of 200 rupees Note :-
How many notes printed: Rs.178 CR.
Total cost of printing: Rs. 522.8 CR.
Cost of printing of 1 note: Rs 2.93
2. Printing of 500 rupees Note :
How many notes printed: Rs.1,695.7 CR.
Total cost of printing: Rs.4,968.84 CR.
Cost of printing of 1 note: Rs. 2.94
So the Reserve Bank has to spend Rs. 2.94 to print a note of Rs. 500. This means that after the printing of 500 rupee note, the government is getting just 497 rupees as a profit and rest is spent as printing cost.
3. Printing of 2000 rupees Note:
How many notes printed: Rs. 365.4 CR.
Total cost of printing: Rs. 1,293.6 CR.
Cost of printing of 1 note: Rs. 3.54
It is known that the Government of India had banned the notes of 1000 after the demonetization in 2016 and issued a new note of Rs. 2000 instead.
It is important to mention here that the main expenditure of printing notes occurs on the purchase of paper, ink, safety thread and machines used in the printing of notes. Here worth to mention that the RBI has to import the note making paper and ink to make these notes.
We hope this article must have enhanced your knowledge about the printing of new currency notes in India.
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