WITHDRAWN: The Rs2,000 note which was introduced after demonetisation has been withdrawn. Though the RBI chief Nripendra Mishra says that purchases can be made with the Rs2,000 note till September 30, 2023.
Former principal secretary Nripendra Mishra claimed that Narendra Modi was against the introduction of the Rs2,000 currency note after demonetisation. Modi admitted that the Rs2,000 note was more a store of value than for transaction by the public.
The Reserve Bank of India (RBI) on Friday announced the withdrawal of Rs2,000 notes from circulation. The BJP ministers have backed the RBI’s decision saying the move will boost digital payment, curb black money and wane tax evasion in the country. On the other hand, the opposition parties have questioned Prime Minister Narendra Modi over the Rs2,000 note issue.
Now when Rs2,000 will soon fade away in the next few months in India a former Principal Secretary has spilled the beans on why the denomination came into existence.
According to a report by Live Hindustan, Mint’s sister publication Principal Secretary Nripendra Mishra said that Prime Minister Modi never favoured Rs2000 denominations.
After demonetization’s announcement in 2016, PM Modi never wanted such a big note to come into the market but had to issue it as a short-term move.
Mishra was Principal Secretary at the time of demonetisation.
He said that PM Modi believed that Rs2,00 was unsuitable for daily transactions. And it would also promote tax evasion and black money.
PM Modi was always in favour of bringing low-value notes into the market for smooth transactions.
The Rs2000 denomination banknote was introduced in November 2016, primarily to meet the currency requirement of the economy expeditiously after the withdrawal of the legal tender status of all Rs500 and Rs1000 banknotes in circulation at that time.
The printing of Rs2,000 notes was stopped in 2018-19. The total value of these banknotes in circulation has declined from Rs6.73 lakh crore at its peak as of March 31, 2018 (37.3% of Notes in Circulation) to Rs3.62 lakh crore constituting only 10.8% of Notes in Circulation on March 31, 2023.
RBI has given over four months to people either deposit Rs2,000 in the bank or exchange them with smaller notes.
The banknotes in Rs2,000 denomination will continue to be legal tender. The central bank believes that four-month time is enough for people to exchange these notes at banks. Most of the Rs2,000 notes that are in circulation are expected to return to banks within the given time frame of 30 September.