NEW DELHI: One-rupee notes printed by the government despite resistance from the Reserve Bank of India are being sold at Rs 49 per note on e-commerce websites such as eBay. It would cost an additional Rs 50 as courier charge, taking the price of a one-rupee note to Rs 99.
A pack of 100 one-rupee new notes is available for Rs 1,200. The notes are also available at the wholesale markets for new currency notes. Interestingly, the cost of a one-rupee note is just Rs 1.14.
An RTI response received by Subhash Chandra Agrawal reveals that the proposal to print one-rupee note was set in motion by the UPA regime in April last year, despite stiff opposition from the RBI. One-rupee notes were discontinued 20 years ago, in 1995-96. However, the Manmohan Singh-led government decided to print 5 million notes in a sudden move.
A file noting of the Ministry of Finance dated April 22, 2014, said, “The sovereign function of the government is to print the one-rupee currency note, which provides legal sanctity to all other higher- denomination bank notes that are promissory notes.”
“As the objective to make one-rupee currency note is to provide legal sanctity, these may not be printed in large numbers. The government may issue five million one-rupee notes every year,” the note from the Ministry of Finance added.
However, the proposal was shot down by the Reserve Bank of India in May 2014, which claimed that the Central government was not empowered to issue it.
After consulting its legal department, the Reserve Bank of India said, “With the repeal of Section 2 of the Currency Ordinance, 1940, in terms of the provisions of Section 27 (1) of the Coinage Act, 2011, the Government of India is not empowered to issue GoI notes of denominational value of one rupee. Nevertheless, if the Central government feels it necessary to issue and put into circulation GoI one-rupee notes, the government may consider the feasibility of promulgating a fresh ordinance for the purpose.”
Notwithstanding the objections raised by the RBI, the Ministry of Finance decided to seek legal opinion from Department of Legal Affairs, which stated that the powers to issue one-rupee note were vested with the Centre.
The RTI response shows that up to June 2015, the Central government printed over 19 million costly one-rupee notes, which are stamped with the signature of current Finance Secretary.
The other denominations of the currency are pledged by the RBI Governor.