Category: Banking & Finance

The cost of printing currency notes in the denomination of ₹50 and ₹500 has come down, while it has gone up for ₹10, ₹20 and ₹100 notes.

According to the information given by the Currency Note Press (a unit of Security Printing and Minting Corporation of India Limited) to an RTI (Right to Information) filed by this correspondent, the standard cost of printing one currency note in the denomination of ₹50 was ₹1.24 in 2018-19, which came down to ₹1.22 in 2019-20. Similarly, the cost of printing one ₹50 note dropped to ₹2.65 from ₹2.71. The cost of printing of each unit of ₹200 in 2018-19 was ₹2.48. However, no cost price was given for FY20. No indent was placed for printing ₹2,000 note in FY20.

Input cost, supply

Though Security Printing Corp did not give any reason for the change in the printing costs, officials attribute it variously to lower input costs or reduced supply due to lower requirements.

According to the RBI’s Annual Report for FY20, indent placed for ₹500 notes was 1,463 crore pieces, while the actual supply from Security Printing Corp and Bharatiya Reserve Bank Note Mudran Private Limited) was 1,200 crore pieces. Similarly, the indent for ₹50 notes was 240 crore pieces, while the actual supply was 234 crore pieces. The supply of ₹100 notes also was less than the indent but not by much.

The Annual Report says: “The indent of bank notes for 2019-20 was lower by 13.1 per cent than that of a year ago. The supply of bank notes during 2019-20 was also lower by 23.3 per cent than in the previous year, mainly due to the disruptions caused by the outbreak of Covid-19 and the ensuing lockdown.”

Volume, value of bank notes

The volume and value of bank notes to be printed in a year depends on various factors such as the expected increase in ‘Notes in Circulation’ (NIC) to meet the growing public demand, and for replacing soiled/mutilated notes so as to ensure that only good quality notes are in circulation.

The expected increase in NIC is estimated using statistical models, which consider macro-economic factors such as expected growth in GDP, inflation, interest rates and growth in non-cash modes of payment. The replacement requirement depends on the volume of notes already in circulation and the average life of banknotes.

Besides these factors, the RBI estimates the volume and value of notes to be printed in a year also on the feedback received from its regional offices and banks on the expected demand for cash. It, then, arrives at the final number in consultation with the Government and the four printing presses – two under Security Printing Corp and two under Bharatiya Reserve Bank Note Mudran Private Limited.

The Finance Ministry on Monday informed the Lok Sabha that Scheduled Commercial Banks (SCBs) have written off loans worth ₹5.85-lakh crore. It also said that declarations received under Vivad Se Viswas Scheme accounted for around 28 per cent of pending tax disputes.

Minister of State in the Finance Ministry Anurag Singh Thakur in a written response said as per RBI data, SCBs have written-off loans of over ₹2.36-lakh crore in FY 2018-19, ₹2.34-lakh crore during FY 2019-20 and over ₹1.15-lakh crore during the April-December period of FY 2020-21.

As per rules, non-performing loans, including those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank concerned by way of a write-off.

As borrowers of written-off loans continue to be liable for repayment and the process of recovery of dues from the borrower in written-off loan accounts continues, write-off does not benefit the borrower.

Thakur said that during the last two financial years and the first three quarters of the current financial years, SCBs recovered over ₹68,000 crore from the written off loan accounts.

Vivad Se Viswas Scheme

In another un-starred question, Thakur said that a total of 1,28,733 declarations have been filed till March 1 under the Vivad Se Viswas Scheme. These include 1,393 declarations by Central PSUs and 833 declarations by State PSUs/ boards. Declarations have been filed by taxpayers for resolution of tax disputes amounting to ₹98,328 crore till March 1. Taxpayers have made a payment of ₹53,346 crore under the scheme.

The total number of pending tax disputes as on the eligibility date was 5,10,491. The 1,28,733 declarations relate to 1,43,126 pending disputes (including cross appeals). “Thus, the declarations received under the scheme cover more than 28 per cent of pending tax disputes,” he said.

Senior citizens

In response to a question related to budget provisions for senior citizens, Thakur said that the Finance Bill, 2021 has proposed to insert a new section to provide exemption for persons over the age of 75 years from filing income-tax returns. This is subjects to the condition that the said person has only pension income and no other income.

However, in addition to such pension income he may have also have interest income from the same bank in which he is receiving his pension income.

Further, this bank is required to be a specified bank. The government will be notifying a few banks as specified banks. The pensioner will be required to furnish a declaration to the specified bank.

Once the declaration is furnished, the specified bank would be required to compute the income of such senior citizen after giving effect to the deduction and rebate allowable and deduct income tax on the basis of rates in force. Once this is done, there will not be any requirement of furnishing return of income by such senior citizen for this assessment year.

“This amendment will take effect from April 1, 2021,” Thakur said.