NEW DELHI: Have you been wondering why the ATMs have been barely dispensing Rs 2,000 notes for last few months?
That’s because the printing of the high-value note has been stopped, the Reserve Bank of India informed this newspaper in reply to an RTI query.
The Bharatiya Reserve Bank Note Mudran Private Limited has not printed a single banknote of Rs 2,000 denomination in this financial year, the RTI reply said.
Experts said the move to taper down and finally stop the printing of the high-value notes appeared to be an attempt to prevent easy hoarding, which defied the government’s initiatives to curb black money flow.
“Possibly, removing high-value notes from circulation makes it difficult to have too many black money transactions. But, it’s a better policy than demonetisation, which was very disruptive. Here, you are not disrupting anything. You are simply withdrawing circulation,” said economist Nitin Desai.
“Many European countries have done this. But in India, we have a very large informal sector and an agricultural sector, which us cash rich,” Desai said, adding that the value of total circulation is being maintained and there would not be much problem.
Economist and author Sher Singh echoed a similar view. “Possibly, they are trying to stop people having a lot of cash or black money. Moreover, the government wants more and more digital transactions. Hoarding is also very easy with Rs 2,000 notes.”
The RBI had introduced the Rs 2,000 note after the government’s sudden announcement to ban old `500 and `1,000 notes in November 2016.
According to the central bank’s RTI reply, 3,542.991 million notes of Rs 2,000 were printed during the financial year 2016-17.
However, the year 2017-18 saw a substantial reduction in printing and only 111.507 million notes were produced, which was further reduced to 46.690 million notes in the year 2018-19.
Officials said a high circulation of Rs 2,000 notes may defeat the government’s objectives as they are easier to use for illegal purposes such as smuggling. In January, unaccounted cash of Rs 6 crore in Rs 2,000 notes was seized at Andhra-Tamil Nadu border.
Earlier this year, there were reports on printing of Rs 2,000 notes being stopped, but the government had denied that.
Even the latest RBI data disclosed gradual reduction in circulation of the Rs 2,000 notes. There were 3,363
million such notes in circulation at the end of March 2018 — 3.3% of the total currency in circulation in terms of volume and 37.3% in terms of value.
This number fell to 3,291 million in FY 2019 — 3% and 31.2% of volume and value, respectively, of the total money in circulation.