Rs. 2000 notes to be demonetized?

Rs.2000 Note Demonitized

The demonetization in 2016 was done to lower the circulation of high denomination currency such as Rs. 500 and Rs. 1000 notes. Though for reasons unknown, the demonetization drive introduced even higher denomination notes of Rs. 2000. Perhaps the logic could be that it would be difficult to produce fake copies of the newly introduced Rs. 2000 notes. Whatever could be the reasons, but sources say that the Rs. 2000 notes are used for stashing up unaccounted money. The reason is simple, higher the currency note, it is easier to stash them, thus is most favored by black money hoarders.

The anticipation of Rs. 2000 being used by black money hoarders was strengthened by a statement by Mr. SC Garg, a former secretary of Economic Affairs. Last year, Mr. Garg said that Rs. 2000 notes are being hoarded and should be demonetized. A data released by the Ministry of Finance in 2018 claimed that Rs. 2000 notes are favored by money hoarders for stashing up unaccounted money. 

The Reserve Bank of India, in a report released this week, says that analyzing the trend of the last five years indicates that Rs. 2000 notes are in the highest demand. This trend may be indicative of the fact that the high denomination notes are being used for money hoarding than payments. In a reply to an RTI in October 2018, RBI said it has stopped printing Rs. 2000 notes as high-quality fake notes have been found in the market. RBI also replied that the high denomination notes are stopped to prevent the hoarding of unaccounted money. ATMs will stop dispensing Rs. 2000 notes from 1st March 2020. It seems likely that Rs. 2000 notes will be demonetized in a year. 

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