Business News
RBI holding back Rs 2000 notes worth Rs 2.4 lakh crore: SBI Report
The most visible after-effect of demonetisation, apart from snaking queues outside ATMs, was the introduction of the bright pink Rs 2,000 notes. But it seems the government has already lost its interest in the one-year-old currency note. According to an SBI Research report, the Reserve Bank of India (RBI) may either be holding back the high denomination note or could have already stopped printing it. The Ecoflash report titled “Are Rs 2,000 high denomination notes being held back?” juxtaposed data presented in the Lok Sabha recently with the latest RBI Annual Report to arrive at this conclusion.
The value of small denomination currency in circulation up to March 2017 was Rs 3.5 lakh crore. This implied that the value of high denomination notes was equivalent to Rs 13.3 lakh crore as on December 8, after netting out the small denomination notes from the currency in circulation on that day. The report further said that, as per the finance ministry’s disclosures in the Lok Sabha, the RBI had printed 16,957 million pieces of Rs 500 notes and 3,654 million pieces of Rs 2,000 notes till December 8. The total value of the latter, thus, stood at Rs 15.7 lakh crore.
“As a logical corollary, as the Rs 2,000 denomination currency led to challenges in transactions, it thus indeed seems that RBI may have either consciously stopped printing the 2,000 denomination notes/or printing in smaller numbers after initially it was printed in ample amount to normalise the liquidity situation,” it said.
Speculation about the pink note being phased out actually began within a month of its introduction. As early as December 2016, RSS ideologue S. Gurumurthy had said that eventually Rs 2,000 notes would be taken out of circulation because it was a stopgap measure to quickly remonetise India. By summer there were various media reports either claiming that the supply of the currency note had declined or that that RBI had already stopped printing them. But the government has been consistently denying such reports. Just four months back, when asked whether the government is considering phasing out Rs 2000 notes, Finance Minister Arun Jaitley had said “No, there was no such discussion.”
