The Reserve Bank of India has reduced to a minimum the printing of Rs 2,000 notes, PTI reported on Thursday, quoting an unidentified Ministry of Finance official. Rs 2,000 notes were introduced after the government banned the old Rs 500 and the Rs 1,000 denominations on November 8, 2016.
“The printing of 2,000 rupee notes has been substantially reduced,” the official said. “It has been decided to limit the printing of 2,000 currency notes to minimum. This is nothing new.” He claimed that the government had decided to reduce the printing of Rs 2,000 notes at the time of their launch itself. He said the note was meant only for the purpose of “remonetisation” following the demonetisation exercise.
However, the reduction in printing of Rs 2,000 notes does not mean they will become invalid. Instead, this denomination is merely likely to be phased out.
The decision to reduce printing of the Rs 2,000 note was taken because of the government’s suspicion that the notes were being hoarded, and used for tax evasion and money laundering, according to The Print. The news website said the RBI did not respond to its email seeking a response.
However, Department of Economic Affairs Secretary Subhash Chandra Garg tweeted that the notes were being printed according to the projected requirement. “We have more than adequate notes of Rs 2,000 in the system with over 35% of notes by value in circulation being of Rs 2,000,” he added. “There has been no decision regarding 2,000 rupee note production recently.”
In March 2017, the total value of the currency in circulation was Rs 18.03 lakh crore. Of this, Rs 6.73 lakh crore (Rs 37%) was in Rs 2,000 notes, while Rs 7.73 lakh crore (43%) was in new Rs 500 notes, PTI reported citing RBI figures.