Published: Fri, January 04, 2019
Markets | By Otis Pena

RBI Reduces Printing Of Rs 2,000 Notes

RBI Reduces Printing Of Rs 2,000 Notes

The Finance Ministry's response comes a day after ThePrint reported quoting unnamed government sources the Reserve Bank of India (RBI) has stopped printing Rs 2000 notes and the move being aimed at slowly reducing the note's circulation.

In December 2017, an SBI Research report had said that the RBI might either be holding back Rs 2,000 notes or could have stopped printing high denomination currency.

On 8 November, 2016, Prime Minister Narendra Modi surprised all by announcing an immediate withdrawal of Rs 500 and Rs 1,000 currency notes, claiming to curb black money and fake notes.

In a tweet, economic affairs secretary Subhash Chandra Garg said printing of notes is planned as per the projected requirement.

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Opposition parties had argued that the Rs 2,000 note would further help money launderers and tax evaders, and backfire on one of the government's stated aims for demonetisation - checking tax evasion and money laundering. At that time, to counter the massive cash shortage, the government flooded the country with new Rs 2,000 notes. The Income Tax department also seized caches of Rs 2,000 notes during this period.

Of the total currency in circulation amounting to Rs 18,037 billion on 31 March 2018, Rs 2000 notes accounted for 37.3%, down from 50.2% on 31 March 2017. This was immediately followed with the introduction of Rs 2,000 note by RBI the same evening. The remaining was in the lower denominations. Close on the heels of these suspicions, the RBI has made a decision to stop the printing of Rs 2,000 to reduce their circulation, the report said. Back then, the Rs 2,000 note was circulated in huge volumes used in order to mitigate the cash shortage that arose due to the note ban.

In 2016-17, 328.5 crore Rs 2,000 notes were in circulation.

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