The Reserve Bank of India on Tuesday said the decision to demonetise Rs 500 and Rs 1,000 notes was made as a result of the "growing menace of fake Indian currency notes in circulation" across the country. RBI Governor Urjit Patel, however, explained that there had been no security breach, but to the public, counterfeit currency notes would appear the same.
Secretary of Economic Affairs Shaktikanta Das, too, gave his assurance that there had been no security breach."The government's decision is bold, powerful and precise to fight the menace of corruption and to fight the use of counterfeit notes used to finance terrorism," he said. "This is another decisive measure that will go a long way in our fight against corruption, which corrodes the basis of our economy."
Das also states statistics that showed the rise in the circulation of counterfeit high denomination notes. Between 2011 and 2016, the circulation of fake Rs 500 notes increased by 76% and that of Rs 1,000 notes rose by 109%, he said. "This is necessary in the medium- and long-term interest of our economy. It will help in maintaining financial and economic integrity," Das added.
The secretary of economic affairs also unveiled the new Rs 2,000 note and Rs 500 notes, saying they will be introduced from November 10. Patel said the production of the new notes had been increased in the last few weeks to ensure that the new currency can be provided as soon as possible.