RBI stops printing, circulating Rs 2,000 currency notes

RBI stops printing, circulating Rs 2,000 currency notes

Amid reports that the Reserve Bank of India has reduced the printing of Rs 2,000 note to "minimum", a top finance ministry official said "no decision has been taken recently", reported news agency ANI.

India has stopped printing its newly launched Rs 2000 notes, to get it slowly out of circulation and thereafter from the market. "At that time, to counter the massive cash shortage, the government flooded the country with new Rs 2,000 notes", as reported by The Print.

The share of the Rs 2,000 notes in the total currency in circulation has come down, according to the RBI's annual report, released in August 2018.

The comment comes a day after a media report, which stated that the government has stopped printing Rs 2,000 notes and plans to phase it out. This was immediately followed with the introduction of Rs 2,000 note by RBI the same evening.

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Opposition parties had earlier criticized the move to introduce the Rs 2,000 note, saying it would result in greater money laundering and tax evasion.

"There has been no decision recently regarding production of Rs 2,000 notes and its printing is planned as per projected requirement, Economic Affairs Secretary Subhash Chandra Garg said". However, the cut in circulation doesn't translate into the note being deemed invalid. The remaining was in the lower denominations. The government suspected cash hoarding ahead of state elections, as well as stocking of money by people in the aftermath of the PNB-Nirav Modi bank fraud. Of the total currency in circulation amounting to Rs 18,037 billion at end-March 2018, Rs 2,000 notes accounted for 37.3 per cent, down from 50.2 per cent at end-March 2017.

To compensate, the printing of Rs 500 notes has been increased.

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