No ₹2,000 notes printed last fiscal in policy shift

NEW DELHI: The Reserve Bank of India’s (RBI) currency note presses did not print even one ~2,000 note in 2019-20. This happened because they did not receive any order to do so. The trend seems to be in keeping with a conscious decision to bring down the share of ~2,000 notes in total currency under circulation, which has come down from at least 50% in 2016-17 to just 22% in 2019-20.

These figures have been reported in RBI’S Annual Report for 2019-20, which was released on August 25. RBI has also disposed of a disproportionate share of ~2,000 notes in the soiled category. This raises questions about the government’s plan for the country’s highest denomination currency note. In January 2019, the government indicated that the printing of ~2,000 notes was being stopped as there was adequate supply.

“Printing of bank notes of particular denomination is decided by the government in consultation with RBI to maintain the desired denomination mix for facilitating transactional demand of public. No indent was placed with the presses for printing of ~2,000 denomination notes for 2019-20.However, there is no decision to discontinue the printing of ~2,000 bank notes,” minister of state for finance Anurag Singh Thakur told the Lok Sabha on March 16, 2020.

~2000 notes were introduced after the government announced demonetisation of the old ~500 and ~1,000 notes on November 8, 2016. These two denominations accounted for 86% of the total currency in circulation when the policy was announced.

The number of ~2,000 notes peaked at 3.36 billion units (or pieces) in 2017-18. This number dropped to 3.29 billion in 2018-19. It has fallen again to 2.73 billion in 2019-20. The fall in number of ~2,000 notes in circulation is in keeping with the decline in orders for printing ~2,000 notes.