RBI Annual Report FY 2025-26 explains currency management, banknotes, coins, ₹2000 withdrawal, counterfeit notes, currency infrastructure and Clean Note Policy.
The RBI Annual Report FY 2025-26 shows that India’s shift towards digital payments has not eliminated the importance of physical currency. The Reserve Bank continued to focus on the Clean Note Policy, adequate supply of banknotes and coins, modernisation of currency-management infrastructure, stronger security features, counterfeit detection and public awareness. At the same time, the withdrawal of ₹2000 banknotes progressed substantially, with 98.45% of the ₹2000 notes in circulation at the time of announcement having returned to the Reserve Bank by March 31, 2026.
For RBI Grade B Promotion Exam, Grade B, UPSC, banking examinations and interviews, this chapter is important because it combines RBI’s currency functions with highly testable statistics on denominations, currency infrastructure, counterfeit notes and the ₹2000 withdrawal process.
1. What Does Currency Management Mean?
Currency management covers the RBI’s responsibilities relating to:
- Issuance and management of banknotes.
- Adequate availability of currency.
- Clean and good-quality banknotes.
- Security and integrity of banknotes.
- Processing and disposal of soiled notes.
- Management of currency chests and small coin depots.
- Counterfeit-note detection.
- Public awareness regarding banknotes and coins.
The guiding principle mentioned at the beginning of the chapter is the Clean Note Policy.
The RBI remained committed to ensuring adequate supplies of clean banknotes and coins to meet the cash demand of the economy. It also continued modernising the currency-management infrastructure and conducted a survey to understand household payment behaviour.
Exam Point
Clean Note Policy = ensuring availability of good-quality, clean and genuine currency for the public.
2. RBI’s Currency Management Agenda for 2025-26
The Department of Currency Management identified five major goals for FY 2025-26:
- Continue modernisation of currency-management infrastructure.
- Strengthen banknote integrity through new/upgraded security features.
- Install and operate new Shredding and Briquetting Systems (SBS).
- Augment banknote-processing capacity.
- Understand public payment behaviour through a survey.
This is a useful way to remember the year’s agenda:
Infrastructure + Security + Disposal + Processing + Behaviour
3. Modernisation of Currency Infrastructure
During FY 2025-26, RBI conducted stakeholder engagements to determine an appropriate architecture for the country’s currency-management infrastructure.
The RBI also continued upgrading banknote-processing infrastructure at its Issue Offices through installation of new SBS machines.
In addition, procurement of new Currency Verification and Processing Systems (CVPS) was underway to augment cash-processing capacity.
Why does this matter?
Currency management is not simply about printing notes.
The complete chain involves:
Design → Printing → Distribution → Verification → Circulation → Withdrawal → Processing → Destruction
The RBI’s infrastructure investments are aimed at making this entire cycle more efficient.
4. New Security Features in Banknotes
The RBI made substantial progress towards introducing new or upgraded security features in banknotes.
A phased rollout of banknotes containing new/upgraded security features was expected to begin from mid-2026.
For 2026-27, strengthening banknote integrity through new/upgraded security features remains a priority.
The RBI also intends to improve the substrate of banknotes for enhanced durability under the Utkarsh 2029 framework.
Exam Connection
Two separate concepts should be remembered:
- Security features → authenticity and anti-counterfeiting
- Improved substrate → durability and longer lifespan
5. Household Payment Behaviour: Cash Is Still Important
The RBI conducted a survey among:
- Individuals, and
- Small retail sellers
to understand their usage and preference for:
- Cash payments
- Digital payment modes
The survey indicated a continued strong preference for cash.
Important interpretation
This is an important counterpoint to the assumption:
“Rapid digitalisation means cash is no longer important.”
The Annual Report’s evidence indicates that digital-payment growth and continued cash usage can coexist.
This has direct implications for RBI’s currency-supply responsibilities.
6. Currency in Circulation: Banknotes Increased
During FY 2025-26:
- Value of banknotes in circulation increased by 11.9%
- Volume of banknotes increased by 10.5%
At end-March 2026, ₹500 notes represented the largest share of banknotes in circulation by volume, followed by ₹10 notes.
Total banknotes in circulation
At end-March:
- 2024: 14,68,754 lakh pieces
- 2025: 15,50,720 lakh pieces
- 2026: 17,13,215 lakh pieces
In value terms:
- 2024: ₹34,77,805 crore
- 2025: ₹36,86,811 crore
- 2026: ₹41,23,995 crore.
7. Denomination-Wise Banknote Structure
This table is extremely important for objective examinations.
| Denomination | Volume share FY 2025-26 | Value share FY 2025-26 |
|---|---|---|
| ₹2 & ₹5 | 6.4% | 0.1% |
| ₹10 | 16.1% | 0.7% |
| ₹20 | 8.2% | 0.7% |
| ₹50 | 6.3% | 1.3% |
| ₹100 | 15.7% | 6.5% |
| ₹200 | 6.1% | 5.1% |
| ₹500 | 41.2% | 85.5% |
| ₹2000 | 0.02% | 0.1% |
The big takeaway
The ₹500 denomination accounted for:
41.2% of banknotes by volume but 85.5% by value.
This happens because ₹500 notes have a much higher denomination than most other notes.
Exam Trap
If asked:
Which denomination has the largest share by volume?
Answer: ₹500
Which denomination has the largest share by value?
Answer: ₹500
8. What Happened to ₹2000 Banknotes?
The withdrawal of ₹2000 denomination banknotes from circulation was initiated through the RBI’s May 19, 2023 announcement.
The process continued during FY 2025-26.
As of March 31, 2026:
98.45% of the ₹3.56 lakh crore of ₹2000 banknotes in circulation at the time of the announcement had returned to the RBI.
What happened to the remaining notes?
The facility for exchange and deposit of ₹2000 banknotes remained available at 19 RBI Issue Offices.
The notes could also be sent through India Post from any post office in the country to RBI’s 19 Issue Offices for credit to bank accounts in India.
9. ₹2000 Banknotes: The Numbers You Must Remember
The stock of ₹2000 banknotes declined significantly:
| End-March | Volume (lakh pieces) | Value (₹ crore) |
|---|---|---|
| 2024 | 410 | 8,202 |
| 2025 | 318 | 6,366 |
| 2026 | 275 | 5,501 |
By end-March 2026, ₹2000 notes represented only:
- 0.02% of total banknotes by volume
- 0.1% by value.
High-Probability MCQ
What percentage of the ₹2000 banknotes outstanding at the time of the May 2023 announcement had returned to RBI by March 31, 2026?
Answer: 98.45%.
10. Coins in Circulation
Coins also increased during FY 2025-26.
The:
- Value of coins in circulation increased by 11.4%
- Volume increased by 4.5%.
At March 31, 2026, coins of:
- ₹1
- ₹2
- ₹5
together accounted for:
80.7% of total coin volume
and:
60.2% of total coin value.
Coin circulation — end-March 2026
| Denomination | Volume (lakh pieces) | Value (₹ crore) |
|---|---|---|
| 50 paise | 1,47,880 | 739 |
| ₹1 | 5,49,855 | 5,499 |
| ₹2 | 3,75,287 | 7,506 |
| ₹5 | 2,31,658 | 11,583 |
| ₹10 | 1,01,542 | 10,154 |
| ₹20 | 26,667 | 5,333 |
| Total | 14,32,889 | ₹40,814 crore |
11. e₹ in Circulation
The Annual Report also provides an important CBDC-related currency statistic.
As of March 31, 2026:
Value of e₹ in circulation = ₹771.7 crore
compared with:
₹1,016.5 crore as of March 31, 2025.
Exam Point
Do not mix up:
Currency in circulation (physical banknotes/coins)
with
e₹ in circulation (CBDC).
They are conceptually different components.
12. India’s Currency Management Infrastructure
As of March 31, 2026, RBI performed currency-management functions through:
- 19 Issue Offices
- 2,599 Currency Chests
- 2,119 Small Coin Depots
across the country.
Currency Chests by institution
| Institution | Currency Chests | Small Coin Depots |
|---|---|---|
| State Bank of India | 1,298 | 1,073 |
| Nationalised Banks | 1,053 | 834 |
| Private Sector Banks | 229 | 196 |
| Cooperative Banks | 5 | 5 |
| Foreign Banks | 5 | 3 |
| Regional Rural Banks | 8 | 7 |
| RBI | 1 | 1 |
| Total | 2,599 | 2,119 |
Exam Fact
SBI had the highest number of Currency Chests — 1,298.
13. What Are Currency Chests?
A Currency Chest is part of the infrastructure through which currency is stored and distributed within the banking system.
For exam purposes, distinguish:
Issue Office
An RBI office directly involved in currency issuance and management.
Currency Chest
A designated repository for holding currency stocks.
Small Coin Depot
A facility for holding and distributing coins.
The Annual Report’s infrastructure numbers are:
19 Issue Offices + 2,599 Currency Chests + 2,119 Small Coin Depots.
14. Banknote Indent and Supply
The RBI places requirements for banknotes and coordinates supply through the printing presses.
During 2025-26, the banknote indent was lower than 2024-25, while the coin indent was higher.
The printing presses supplied banknotes according to the indent placed with them.
Banknote supply in FY 2025-26
| Denomination | Indent | Supply |
|---|---|---|
| ₹10 | 46,000 lakh | 46,000 lakh |
| ₹20 | 20,000 lakh | 20,000 lakh |
| ₹50 | 20,000 lakh | 20,000 lakh |
| ₹100 | 70,000 lakh | 70,000 lakh |
| ₹200 | 15,000 lakh | 15,000 lakh |
| ₹500 | 1,10,000 lakh | 1,10,000 lakh |
| Total | 2,81,000 lakh | 2,81,000 lakh |
15. Soiled Banknotes and Shredding & Briquetting Systems
Soiled banknotes need to be removed from circulation and appropriately processed.
During FY 2025-26, disposal of soiled banknotes was lower than the previous year because of temporary interruptions arising from replacement of Shredding and Briquetting Systems (SBS) at RBI Issue Offices.
Total disposal
| Year | Soiled banknotes disposed (lakh pieces) |
|---|---|
| 2023-24 | 2,12,493 |
| 2024-25 | 2,38,563 |
| 2025-26 | 1,70,237 |
Why SBS matters
SBS refers to Shredding and Briquetting Systems.
Its purpose is associated with processing/disposal of withdrawn or soiled currency.
16. Counterfeit Indian Currency Notes
Counterfeit currency remains an important component of currency management.
During FY 2025-26, the banking system detected:
2,29,746 counterfeit notes
compared with:
2,17,396 in FY 2024-25.
Where were they detected?
| Location | FY 2025-26 |
|---|---|
| Reserve Bank | 5,412 |
| Other banks | 2,24,334 |
| Total | 2,29,746 |
The RBI’s share was only 2.4%, while other banks detected 97.6%.
Important caution
These figures relate to counterfeit notes detected in the banking sector and do not include counterfeit notes seized by police and other enforcement agencies.
17. Which Denomination Had the Most Counterfeit Notes?
The denomination-wise data for FY 2025-26 show:
| Denomination | Counterfeit notes detected |
|---|---|
| ₹10 | 133 |
| ₹20 | 373 |
| ₹50 | 10,274 |
| ₹100 | 45,621 |
| ₹200 | 30,591 |
| ₹500 specified banknotes | 15 |
| ₹500 | 1,41,907 |
| ₹1,000 specified banknotes | 8 |
| ₹2000 | 824 |
| ₹2 & ₹5 | 0 |
| Total | 2,29,746 |
Exam Fact
The ₹500 denomination accounted for the largest number of counterfeit notes detected in the banking system in FY 2025-26.
18. A Useful Counterfeit-Currency Trend
The total counterfeit notes detected in the banking system changed as follows:
- FY 2023-24: 2,22,639
- FY 2024-25: 2,17,396
- FY 2025-26: 2,29,746
However, the proportion detected directly at RBI declined:
- FY 2023-24: 7.9%
- FY 2024-25: 4.7%
- FY 2025-26: 2.4%
while the proportion detected at other banks increased to 97.6%.
Exam Interpretation
Do not conclude from this alone that counterfeiting increased or decreased overall in an economic sense.
The data represent notes detected in the banking system, not all counterfeit currency existing in circulation.
19. Security Printing Expenditure
Expenditure on security printing during FY 2025-26 was:
₹4,875.2 crore
compared with:
₹6,372.8 crore
in the previous year.
The Annual Report attributes the decline to the reduced indent of banknotes during 2025-26.
Exam Question
Why did expenditure on security printing decline in FY 2025-26?
Answer: Mainly because the indent of banknotes was lower.
20. Indian Currency Microsite
A notable public-awareness initiative was the launch of the Indian Currency Microsite on September 10, 2025.
It replaced the earlier “Paisa Bolta Hai” microsite.
The new microsite provides information about:
- Banknote designs
- Security features
- 360-degree views
- Videos
- Audio
- Animations
- Interactive games
- Exchange of banknotes.
Exam Point
Indian Currency Microsite → launched September 10, 2025.
21. Citizen’s Charter and Currency Services
Three services were brought under the RBI’s Citizen’s Charter:
- Exchange of notes received through Postal Covers
- Notes received through Triple Lock Receptacles (TLRs)
- Notes that cannot withstand normal handling
The objective was to improve efficiency of services to the general public.
22. Public Awareness on Coins and Soiled Notes
The RBI conducted sustained awareness campaigns through:
- Print media
- Digital media
- Social media
to counter misinformation regarding coins.
The campaigns resulted in a substantial increase in acceptance of coins by the public.
Separate campaigns were also conducted to create awareness about facilities for exchanging soiled banknotes.
Broader lesson
Currency management is not only an infrastructure problem.
It also involves:
Public trust + awareness + authenticity + accessibility.
23. Improving Banknote Safety and Hygiene
The RBI also worked on improving the safety and hygiene standards of banknotes.
Anti-bacterial and anti-microbial treatments developed in-house by the banknote paper mill were integrated into the paper-manufacturing process.
The Annual Report states that this resulted in further improvements in the safety and hygiene standards of Indian banknotes.
This is a niche fact but potentially useful for a detailed RBI-specific examination.
24. BRBNMPL: RBI’s Banknote-Printing Subsidiary
Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) plays a critical role in:
- Designing banknotes
- Printing banknotes
- Supplying banknotes
During FY 2025-26, print trials of varnished notes were conducted at BRBNMPL’s Mysuru printing press.
Its Currency Research and Development Centre (CRDC) also initiated collaboration efforts with research institutions for R&D in banknotes.
Exam Point
BRBNMPL = Bharatiya Reserve Bank Note Mudran Private Limited
It is a wholly owned subsidiary of RBI.
25. 2026-27 Currency Management Priorities
The Annual Report identifies four major areas for 2026-27:
1. Stronger banknote security
Introduction of new/upgraded security features.
2. Better banknote substrate
Improving substrate for greater durability under Utkarsh 2029.
3. Processing capacity
Further augmentation of banknote-processing capacity.
4. Issue Office network
Continued improvement of existing Issue Offices and opening of two new Issue Offices.
26. The Big Picture: Cash vs Digital Payments
This chapter becomes more interesting when connected with the earlier payments chapters of the Annual Report.
India is experiencing rapid digital-payment adoption.
At the same time:
- Banknotes in circulation increased.
- The household survey indicated strong preference for cash.
- Currency infrastructure continued to be modernised.
Therefore, the RBI’s approach is not:
Digital payments OR cash
It is effectively:
Digital payments AND reliable cash infrastructure
The two can coexist because different segments of the economy continue to have different payment preferences.
27. Cause → Development → Effect → Significance
Cause
The Indian economy continues to require cash while digital payments are rapidly expanding.
Development
RBI strengthened:
- Currency infrastructure
- Banknote security
- Processing capacity
- Public awareness
- Counterfeit detection
- Clean-note management
Effect
The currency system remains capable of supplying clean, secure and genuine banknotes while adapting to changing payment behaviour.
Significance
For RBI, currency management is ultimately about maintaining confidence in physical money.
That requires three things:
Availability + Authenticity + Quality
28. Most Important Numbers to Memorise
| Topic | FY 2025-26 |
|---|---|
| Banknote circulation — value growth | 11.9% |
| Banknote circulation — volume growth | 10.5% |
| Total banknotes — volume | 17,13,215 lakh pieces |
| Total banknotes — value | ₹41,23,995 crore |
| ₹500 volume share | 41.2% |
| ₹500 value share | 85.5% |
| ₹2000 notes returned to RBI | 98.45% |
| ₹2000 notes originally in circulation | ₹3.56 lakh crore |
| ₹2000 notes outstanding at March 2026 | ₹5,501 crore |
| Coin circulation — value growth | 11.4% |
| Coin circulation — volume growth | 4.5% |
| ₹1+₹2+₹5 coin volume share | 80.7% |
| ₹1+₹2+₹5 coin value share | 60.2% |
| e₹ in circulation | ₹771.7 crore |
| RBI Issue Offices | 19 |
| Currency Chests | 2,599 |
| Small Coin Depots | 2,119 |
| SBI Currency Chests | 1,298 |
| Soiled notes disposed | 1,70,237 lakh pieces |
| Counterfeit notes detected | 2,29,746 |
| Counterfeit detected at RBI | 2.4% |
| Counterfeit detected at other banks | 97.6% |
| Security printing expenditure | ₹4,875.2 crore |
| Indian Currency Microsite launch | September 10, 2025 |
| New security-feature rollout expected | Mid-2026 |
| New Issue Offices planned for 2026-27 | 2 |
29. High-Probability Exam Questions
Q1. What is the main policy guiding RBI’s currency-management operations?
Answer: Clean Note Policy.
Q2. By what percentage did the value of banknotes in circulation increase in FY 2025-26?
Answer: 11.9%.
Q3. By what percentage did the volume of banknotes increase?
Answer: 10.5%.
Q4. Which denomination accounted for the largest share of banknotes by value?
Answer: ₹500 — 85.5%.
Q5. What percentage of ₹2000 banknotes had returned to RBI by March 31, 2026?
Answer: 98.45%.
Q6. What was the value of ₹2000 notes outstanding at end-March 2026?
Answer: ₹5,501 crore.
Q7. What was the value of e₹ in circulation at end-March 2026?
Answer: ₹771.7 crore.
Q8. How many RBI Issue Offices existed at end-March 2026?
Answer: 19.
Q9. How many Currency Chests existed?
Answer: 2,599.
Q10. How many Small Coin Depots existed?
Answer: 2,119.
Q11. Which institution had the largest number of Currency Chests?
Answer: State Bank of India — 1,298.
Q12. How many counterfeit notes were detected in the banking system in FY 2025-26?
Answer: 2,29,746.
Q13. What percentage of counterfeit notes were detected at RBI?
Answer: 2.4%.
Q14. Which denomination accounted for the highest number of counterfeit notes?
Answer: ₹500.
Q15. When was the Indian Currency Microsite launched?
Answer: September 10, 2025.
Q16. What is BRBNMPL?
Answer: Bharatiya Reserve Bank Note Mudran Private Limited, a wholly owned subsidiary of RBI involved in banknote design, printing and supply.
30. One-Minute Revision Sheet
Clean Note Policy → core currency-management principle
Banknote value growth → 11.9%
Banknote volume growth → 10.5%
Total banknotes → ₹41.24 lakh crore approximately
₹500 → 41.2% volume, 85.5% value
₹2000 returned → 98.45%
₹2000 outstanding → ₹5,501 crore
Coins → +11.4% value, +4.5% volume
₹1+₹2+₹5 coins → 80.7% volume
e₹ circulation → ₹771.7 crore
Issue Offices → 19
Currency Chests → 2,599
Small Coin Depots → 2,119
SBI Currency Chests → 1,298
Soiled notes disposed → 1,70,237 lakh pieces
Counterfeit notes → 2,29,746
RBI counterfeit detection → 2.4%
Other banks → 97.6%
Security printing expenditure → ₹4,875.2 crore
Indian Currency Microsite → September 10, 2025
BRBNMPL → RBI wholly owned subsidiary
2026-27 → new security features + durable substrate + processing capacity + 2 new Issue Offices
Key Takeaways
- RBI’s currency-management operations remain guided by the Clean Note Policy.
- Banknote circulation increased significantly in FY 2025-26 despite rapid digital-payment adoption.
- The value of banknotes in circulation increased 11.9%, while volume increased 10.5%.
- ₹500 notes accounted for 41.2% of volume but 85.5% of value.
- 98.45% of ₹2000 notes outstanding at the time of the May 2023 withdrawal announcement had returned to RBI by March 31, 2026.
- The value of ₹2000 notes outstanding fell to ₹5,501 crore.
- Coins in circulation increased by 11.4% in value and 4.5% in volume.
- The value of e₹ in circulation stood at ₹771.7 crore at end-March 2026.
- India’s currency infrastructure comprised 19 Issue Offices, 2,599 Currency Chests and 2,119 Small Coin Depots.
- SBI accounted for the largest number of Currency Chests.
- The banking system detected 2,29,746 counterfeit notes, of which 2.4% were detected at RBI.
- ₹500 accounted for the largest number of counterfeit notes detected.
- Security-printing expenditure declined to ₹4,875.2 crore, primarily because the banknote indent was lower.
- The Indian Currency Microsite was launched on September 10, 2025, replacing “Paisa Bolta Hai”.
- BRBNMPL remains an important RBI subsidiary for banknote design, printing and supply.
- RBI’s 2026-27 priorities include stronger security features, more durable banknote substrate, higher processing capacity and two new Issue Offices.
Final Exam Perspective
For the RBI Grade B Promotion Exam, do not study this chapter merely as a list of currency statistics.
Understand the institutional chain:
RBI → Currency Management → Clean Notes → Security Features → Currency Chests → Processing → Counterfeit Detection → Public Awareness
Then connect it with the larger financial system:
Cash demand ↔ Digital payments ↔ Currency circulation ↔ Monetary system ↔ Public confidence
The most important factual cluster is:
₹500 = largest denomination by circulation share → ₹2000 withdrawal = 98.45% returned → 19 Issue Offices → 2,599 Currency Chests → 2,119 Small Coin Depots → 2,29,746 counterfeit notes → 2.4% detected at RBI → ₹4,875.2 crore security-printing expenditure.
If these numbers and the underlying institutional logic are clear, this chapter becomes a relatively easy source of direct MCQs and interview questions.
Part 20 complete.