Former Principal Secretary to Prime Minister Narendra Modi, Nripendra Misra told ANI that PM Modi was not in favour of ₹2,000 notes coming into circulation but he reluctantly agreed to it after he was told that the demonetisation has to be done in a limited time and there was a lack of capacity to print smaller currency notes.
In an exclusive interview with ANI Misra said, "PM Modi was not at all in favour of ₹2,000 notes. But, as demonetisation was to be done in a limited time, he gave reluctant permission for it...PM never considered ₹2000 note as note of the poor, he knew Rs 2,000 (note) has hoarding value instead of transactional value."
He also added that PM Modi was not in favour of currency notes being printed outside the country.
"In the period that the (demonetised) notes were to be deposited and new notes brought out, the capacity to print (new notes) was less and the option was to bring ₹2,000 note. The team that was working made the proposal that ₹2,000 notes will have to be printed in the wake of limited time. The Prime Minister was not at all enthused," Misra said.
PM Modi felt Rs 2,000 notes not for common man
Explaining it further he said PM Modi felt that the effort was to tackle black money and if a bigger denomination note comes then the capacity to hoard will increase. Misra said the PM felt that ₹2,000 is not for the common man and can somewhere contribute to hoarding if it is not deposited in banks.
"When he was told about the capacity to print currency notes, and that even if two-three shifts are held, the target cannot be met..the only alternative left was to print ₹2,000 note for a limited period...the Prime Minister, in principle, was against it but for practical considerations, he reluctantly agreed. There was not an iota of doubt in his mind that when there is adequate capacity in the future, the ₹2,000 note should be discontinued," Misra said.
Misra further stated that ₹2,000 notes were not being printed since 2018 and Reserve Bank of India has also not been bringing back to circulation "soiled" ₹2,000 notes that came to it from banks.
RBI withdraws ₹2,000 notes
The RBI on Friday decided to withdraw the ₹2,000 denomination currency notes from circulation, but added they will continue to remain as legal tender. RBI had advised banks to stop issuing ₹2,000 denomination banknotes with immediate effect.
RBI, however, said that citizens will continue to be able to deposit ₹2,000 banknotes into their bank accounts and/or exchange them into banknotes of other denominations at any bank branch up to September 30, 2023.
The exchange of ₹2,000 bank notes into notes of other denominations can be made upto a limit of ₹20,000 at a time at any bank starting from May 23, 2023.
Why are ₹2,000 notes being withdrawn?
RBI has also said ₹2,000 denomination banknote was introduced in November 2016, primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of the legal tender status of all Rs 500 and ₹1,000 banknotes in circulation at that time. The objective of introducing ₹2,000 banknotes was met once banknotes in other denominations became available in adequate quantities.
Therefore, the printing of ₹2,000 banknotes was stopped subsequently in 2018-19. The total value of these ₹2,000 banknotes in circulation has declined from ₹6.73 lakh crore on March 31, 2018 to ₹3.62 lakh crore constituting only 10.8 per cent of Notes in Circulation on March 31, 2023.
With inputs from ANI
