According to a central bank official, the French company, which had earlier bagged a tender to print 40 million units of 500 rupee notes, has not seriously responded to the repeated attempts by the central bank to come for negotiations to increase the note print order.
"We requested the French company to send a team of representatives for negotiations as soon as possible, but we received a cold response: the company said it could send its representatives only in July," said the official.
Earlier, in the last week of April, the board of the central bank had authorized the management of the central bank to raise the volume of the existing printing order for 500 rupee notes to 100 million units and to immediately invite the French company for negotiations.
The latest development has also raised the possibility of the central bank´s floating a global tender for printing 100 million units of 500 rupee notes, said the official, but he added that the management of the central bank would probably wait till the end of this week before deciding on the course of action.
"We will be left with no other options than to go for global tenders among the pre-qualified security printers if the French company doesn´t respond positively by the end of this week," said the official. He also said that the NRB currently has a list of a dozen pre-qualified companies who will participate in the tender process. NRB reviews its pre-qualified companies every two years.
If the NRB opts for a global tender, the country will probably get the first supply of fresh 500 rupee notes in May 2009, which will be three months later than the earlier expected date. That delay, said the official, is expected because the global tender will have to pass through various legal requirements.
The 40 million units of 500 denomination notes to be produced by the French company will be supplied by the end of July, and according to the concerned NRB officials, those notes will be enough to meet the higher demand that´s generated during the festival seasons.
Apart from the 500 rupee notes, the central bank has also placed an order for 100 million units of 1,000 rupee notes. But that consignment will be arriving only in January 2010.
As a result of unusual withdrawals from banks and the delay incurred in replacing old notes by the central bank, the market has been suffering a shortage 1,000 and 500 rupee notes.
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