As inflation rises, jobs decrease, and the common man's pocket is affected. In such times, RBI has the authority to print notes, so why don't they print plenty of notes and give money to people? Or why don't they reduce the country's debt? Such questions arise. Detailed information about RBI and the process of printing notes.
Although the RBI has the authority to print notes, they cannot print them at will. Special rules and permissions are required to print notes. In India, this process operates under the 'Minimum Reserve System'. Notes are printed considering foreign reserves and gold reserves, ensuring that the value of each note remains intact.
The RBI works meticulously to ensure that the value of notes does not decrease. This decision is not made by the RBI alone but in conjunction with the central government. Notes are printed considering the demand for notes in the market, whether old notes are damaged, inflation rates, and the economic situation.
If more notes are printed, there will be more money in the market and inflation will rise terribly. People's trust in the notes will diminish, and the value of the currency will fall. This can cause the economy to collapse. Therefore, the RBI prints only as many notes as needed to maintain stability.