The Indian government has recently provided clarity on the future of the country’s currency system, particularly in light of discussions around the Rs 2000 note and potential plans for higher denomination notes. During the Rajya Sabha session on December 3, 2024, the government made important announcements regarding the circulation of currency notes and the future of digital currency in India.
No Plans for Higher Denomination Notes
In response to questions in the Rajya Sabha, Pankaj Chaudhary, the Minister of State for Finance, confirmed that there are no plans to issue currency notes with denominations higher than Rs 500. This decision comes as part of the government’s efforts to maintain the stability and security of the currency system, ensuring that denominations remain practical for everyday transactions and limiting the risks of high-value currency notes being misused.
Phasing Out Rs 2000 Notes and Its Impact
The government also provided an update on the ongoing process of withdrawing Rs 2000 notes from circulation. The Rs 2000 denomination was introduced by the Reserve Bank of India (RBI) in November 2016, as per the Reserve Bank of India Act, 1934. As of March 31, 2017, the total number of Rs 2000 notes in circulation was 32,850 lakhs, which increased to 33,632 lakhs by March 31, 2018.
However, on May 19, 2023, the RBI announced that it would withdraw the Rs 2000 notes from circulation. At that time, there were 17,793 lakh Rs 2000 notes in circulation. By November 15, 2023, 14,577 lakhs of these notes had been returned to the RBI. In total, 17,447 lakh Rs 2000 notes were either deposited or exchanged, leaving just 346 lakh Rs 2000 notes still in circulation.
While the Rs 2000 notes are no longer being printed, they continue to be legal tender. Citizens can exchange these notes at designated banks, and the government has ensured that the exchange facility is available at 19 RBI Issue Offices. Additionally, Rs 2000 notes can be sent through India Post to any RBI Issue Office for deposit into bank accounts.
