6 facts about withdrawal of ₹2,000 notes that will put panic and speculation to rest

By: FPJ Web Desk | May 19, 2023

According to RBI the fluroscent pink Rs 2,000 were launched after demonetisation only to meet the demand for cash after the withdrawal of Rs 500 and Rs 1,000 notes, until enough notes of other denominations were available.

It was about time that the Rs 2,000 notes were withdrawn as their presence among notes being circulated fell from 22.65% in 2020 to 13.8% in March 2022, while the same for Rs 500 notes went from 29% to 73%.

Since the initial days, Rs 2,000 notes had created a hassle for common Indians as finding change for it remains a struggle, and lower denomination notes are preferred.

Last year, BJP MP Sushil Modi had called the move to introduce higher denomination notes like Rs 2,000 illogical, and also added that it is being hoarded to be used in illegal trade.

RBI's clean note policy for ensuring presence of good quality notes is also a reason behind withdrawal of Rs 2,000 notes, since 89% of them entered circulation in 2017, and have come to the end of their 5-year lifecycle.

Increasing use of UPI and apps such as Paytm for everyday transactions, and the reliance on debit cards for big payments, has also contributed towards the decline in demand for Rs 2,000 notes.