Amid the demand for banning Rs 2000 currency notes, the Central Government has clarified the status of circulation of the high-value notes. BJP Rajya Sabha MP Sushil Kumar Modi recently urged the Government in Parliament to phase out Rs 2000 denomination notes in a phased manner.
After raising the issue during Zero Hour in Rajya Sabha, Modi had told news agency ANI that there was information that people had hoarded Rs 2000 notes and using them for “terror funding, drug trafficking and hoarding black money”.
Giving the example of developed economies like the US, China and Germany, which do not have currency notes above 100, Modi said that the Central Government should think about banning Rs 2000 notes in a phased manner so that people have time to replace them with other small denominations.
Meanwhile, replying to a query in the Lok Sabha, the Central Government said on Monday (December 12) that no fresh Rs 2000 notes have been printed from 2018-19 onwards. The share of Rs 2000 denomination banknotes from total Notes in Circulation (NIC) has dropped from 22.65% in 2020 to 13.8% by March 2022. The share of Rs 500 notes has increased to 73.3% from 29.7% between 2020 and 2022.
“Printing of banknotes of a particular denomination is decided by Government of India in consultation with Reserve Bank of India (RBI) to maintain desired denomination mix for facilitating transactional demand of public. No fresh indent has been placed with the presses for printing of ₹2000 denomination notes from 2018-19 onwards. Further, banknotes go out of circulation as they get soiled/mutilated,” Union Minister State in the Ministry of Finance Pankaj Choudhary said.
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“On 31.03.2020 the share of ₹ 2000 denomination banknotes in terms of value to the total Notes in Circulation (NIC) was 22.6%. As on 31.03.2022, the share of ₹ 2000 denomination banknotes in terms of value to the total NIC was 13.8%. The share of ₹500 denomination banknotes, in terms of value to the total NIC has increased from 29.7% as on 31.03.2000 to 73.3% as on 31.03.2022. Demand for currency depends upon several macro-economic factors including economic growth and level of interest rate. Increase of digital transactions also affects requirement for currency,” he added.
The Minister further said that as per RBI’s data, there were 21,420 lakh pieces of Rs 2000 notes in circulation as of March 31, 2022.