Is it end of the road for India’s 2,000 banknote?
ATMs being recalibrated to dispense Rs500
Banks across India are reportedly recalibrating their ATMs to replace the high-value Rs2,000 notes with Rs500 ones, giving rise to speculation that the currency is being gradually taken out of circulation.
Last week, Indian Bank, a leading public sector bank said it will no longer keep Rs2,000 notes in its ATMs, citing public inconvenience. As per a Right to Information query in October 2019, the printing of Rs2,000 notes had been stopped for the preceding 18 months. The central bank printed 3.54 billion worth these notes in 2016-17, but not a single one was printed in the current financial year.
Although the Ministry of Finance or India central bank have not given the final verdict on the note’s future, bankers said it is destined to go out of circulation.
Banks across India are reportedly recalibrating their ATM machines to replace the high-value 2,000 rupee notes with 500 rupee ones, raising questions about the future of the high-value denomination.
Although there has been no official confirmation from Reserve Bank of India (RBI) or other authorities, on the withdrawal of the currency from circulation, there have been widespread news reports the currency is being gradually taken out of circulation. It is assumed that this could be part of the strategy of the central bank to keep a tab on the total amount of high-value currency in circulation.
Last week, Indian Bank, a leading public sector bank, said that it will no longer keep 2,000 rupee notes in its ATMs, citing public inconvenience, who found it hard to exchange the notes. The decision will come into effect on March 1. A number of other banks also said they are in the process of recalibrating their ATMs to replace the 2,000 notes with smaller denomination notes such as Rs100, 200, and 500.
Printing stopped
As per an RTI (right to information) query in October last, the printing of Rs2,000 notes had been stopped for the preceding 18 months.
At the launch of the 2,000 rupee note it was claimed that the new ones have additional security features that would make them impossible to be copied by counterfeiters, hence curbing the problem of fake currency.
However, the government data showed that violating the security barriers in new notes was not a difficult task.
Finance Minister Nirmala Sitharaman on Wednesday said that no instructions have been given to banks on stopping issuing notes of Rs2,000 denomination.