Govt stops printing new Rs 2,000 notes

Govt stops printing new Rs 2,000 notes

Govt stops printing new Rs 2,000 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.

"There has been no recent decision regarding Rs 2,000 note production", Garg said in his tweet.

The cut in circulation does not mean the Rs 2,000 notes will become invalid.

Soon after the overnight ban on Rs 500 and 1,000 notes, which wiped out 80 per cent of the currency in circulation, RBI came out with the Rs 2,000 note and a new-look Rs 500 note.

As many as 328.5 crore Rs 2,000 notes were in circulation in 2016-17.

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. The government suspected that the cash may have been hoarded ahead of state elections and in the aftermath of the Nirav Modi scam. The remaining is in lower denominations.

So, two years after its introduction, the currency note which aimed at ending circulation of fake currency and black money, appears headed to a slow extinction. However, the latest RBI report released in August 2018, revealed that only 7.8 crore notes of Rs 2000 denomination were added in 2017-18, taking the overall circulation to 336.3 crore, as of March 2018.

During the same period, the income tax department seized massive amounts of Rs 2,000 notes.

This implies that the value of high denomination notes was equivalent to Rs 13,324 billion as on 8 December 2017, after netting out the small denomination notes from the currency in circulation on that day, it said.

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

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