The Reserve Bank of India (RBI) on Thursday announced it will issue INR200 denomination banknotes to promote "ease of transactions", replace soiled banknotes, control inflation and help combat counterfeiting.

The new bill will be available on August 25, 2017 at selected RBI offices and some banks, the bank said in a statement.

"The new denomination has the motif of Sanchi Stupa on the reverse, depicting the country’s cultural heritage. The base colour of the note is bright yellow. The note has other designs, geometric patterns aligning with the overall colour scheme, both at the obverse and reverse," said a statement from RBI.

"To achieve the optimal system of currency that would minimise the number of denominations while increasing the probability of proffering exact change, especially at the lower end of denominations, there is a logical need to introduce the missing denomination of INR200, which will make the present currency system more efficient," the statement said.

This is the second new denomination banknote introduced since the demonetisation exercise in November last year, Indian daily The Hindu reported on Wednesday. "INR2,000 denomination banknote was pumped into the system in November 2016," the report recalled.

On Nov 8, 2016, Indian Prime Minister Narendra Modi had announced the sudden invalidation of all high denomination currency notes, sparking a nationwide backlash and protests as the move translated into declaring a whopping 86 per cent of the country’s cash useless until and unless the bills were exchanged with the new notes.

The move’s primary intention was to catch tax evaders. A significant portion of India’s cash is said to be ill-gotten or undeclared, and it passes hands in an extensive shadow economy that goes un-taxed.

Invalidating 500 and 1,000 rupee notes meant that all Indians, including those hoarding large amounts of cash, would have to exchange those notes for new ones at a bank. In the process, official thinking went, all cash would become accounted for, and those who had been evading taxes would either have to stomach huge losses or declare their assets and pay major penalties.

But the move was labelled as controversial within weeks of its announcement, as alleged financial criminals reportedly managed to acquire hefty amounts of new notes anyway.