From 2016 to 2018, life of a Rs 2,000 note; All you need to know

The supply of Rs 2,000 notes has also been reduced substantially since April 2017.

Latest News : For a long time, the government and the Reserve Bank of India were silent on the supply and printing of Rs 2,000 notes. Without clarifying when the printing of Rs 2,000 notes were discontinued, the government recently said supply of these notes in the system were adequate. Business Standard takes a look at the journey of the high-value currency note that was introduced in November 2016 when the government had announced demonetisation of old Rs 500 and Rs 1,000 notes.

2016

• August: RBI’s printing press Bhartiya Reserve Bank Note Mudran Private Limited starts printing Rs 2,000 notes
• November: Prime Minister Narendra Modi announces demonetisation of Rs 500 and Rs 1,000 notes; Rs 2,000 notes are soon supplied in the market
• December: Rs 2,000 notes worth Rs 3,216 billion pumped into the system till December-end; about 58 per cent of the total notes supplied after demonetisation

2017

• March: Rs 2,000 notes amounting to Rs 7,008 billion printed till March 31; RBI’s annual report says Rs 6,570 billion worth notes of Rs 2,000 were in circulation (about 50% in value)
• December: The government says Rs 2,000 notes worth Rs 7,309 billion printed till December 15, indicates no new Rs 2,000 note printed for a while

2018

• February: Minister of State for Finance Pon Radhakrishnan tells Lok Sabha only small denomination currency notes being printed at present.
• On April 17, Economic Affairs Secretary Subhash Garg said Rs 2,000 notes worth Rs 6,750 billion in the system “sufficient” so printing of Rs 2,000 has been halted “since a few days”

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RBI may be holding back Rs 2,000 notes or stopped printing them

High-value notes worth Rs 2.46 lakh cr not released, says the report

 

The Reserve Bank of India (RBI) may either be holding back Rs 2,000 notes or could have stopped printing high denomination currency, says a SBI Research report.

Juxtaposing the data presented in the Lok Sabha recently with the one provided by RBI in its Annual Report earlier, the SBI Ecoflash report said today, “we observe” that the value of small denomination currency in circulation up to March 2017 was Rs 3,501 billion.

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

The report further said that as per the Ministry of Finance in the Lok Sabha recently, the RBI has printed 16,957 million pieces of Rs 500 notes and 3,654 million pieces of Rs 2,000 notes as on December 8. The total value of such notes translates into Rs 15,787 billion.

“This means that the residual amount of high currency notes (Rs 15,787 billion Rs 13,324 billion) of Rs 2,463 billion may have been printed by the RBI but not supplied in the market,” said the report authored Soumya Kanti Ghosh, group chief economic adviser, SBI.

Interestingly, the report added, “it is safe to assume” that Rs 2,463 billion may be on the lower side as the RBI must have printed notes of small denomination in the interregnum (Rs 50 and Rs 200).

“As a logical corollary, as 2000 denomination currency led to challenges in transactions, it thus indeed seems that RBI may have either consciously stopped printing the 2000 denomination notes/or printing in smaller numbers after initially it was printed in ample amount to normalise the liquidity situation,” said Ecoflash.

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