The Reserve Bank of India (RBI) has denied reports suggesting a plan to reintroduce ₹1,000 banknotes as a means to ease the impact of withdrawing ₹2,000 notes from circulation. RBI Governor Shaktikanta Das addressed these speculations, stating that there is currently no such proposal under consideration.
Mr. Das dismissed the notion of reintroducing ₹1,000 notes, terming it as speculative. He emphasized that there are no plans in place at present regarding the reintroduction of the denomination. When asked about the possibility of such a move, he categorically stated, “That’s speculative. There’s no such proposal right now.”
The ₹2,000 banknote was initially introduced in November 2016 as part of an effort to swiftly meet the currency requirements of the economy after the significant demonetization exercise. During this exercise, the legal tender status of all ₹500 and ₹1,000 banknotes in circulation at the time was withdrawn, resulting in the elimination of ₹10 lakh crore overnight.
The RBI clarified that the printing of ₹2,000 banknotes ceased in 2018-19, as the objective of meeting currency requirements had been fulfilled, and other denominations were available in sufficient quantities.
Governor Das, speaking to reporters for the first time since the surprise decision, urged individuals not to rush to return or exchange their ₹2,000 notes. He reassured the public that there is no need for immediate action, as they have until September 30 to exchange or deposit the notes. The deadline was set primarily to encourage people to take the matter seriously and make necessary arrangements.
Mr. Das emphasized that the withdrawal of ₹2,000 notes would have a minimal impact on the economy. He noted that ₹2,000 notes constitute only 10.8% of the total currency in circulation, making the overall impact “very, very marginal.”
The RBI governor clarified that the introduction of ₹2,000 banknotes had primarily served the purpose of replenishing the currency supply after demonetization. As of now, the majority (89%) of the ₹2,000 notes in circulation were issued before March 2017, and they have reached the end of their estimated lifespan of four to five years, according to the central bank.
The RBI highlighted that the value of ₹2,000 banknotes in circulation has significantly declined since its peak on March 31, 2018. At that time, the value stood at ₹6.73 lakh crore, accounting for 37.3% of the total notes in circulation. However, as of March 31, 2023, the value of ₹2,000 notes had reduced to ₹3.62 lakh crore, constituting just 10.8% of the total notes in circulation.
In conclusion, the RBI Governor’s statement dismisses rumors regarding the reintroduction of ₹1,000 notes. He assured the public that there is no current proposal to reintroduce the denomination. Individuals are advised not to rush to banks for immediate exchanges, as they have until September 30 to make the necessary arrangements. The withdrawal of ₹2,000 notes is expected to have a minimal impact on the economy, given their relatively small share in the overall currency circulation.