The Reserve Bank of India (RBI) does not have a plan to reintroduce Rs 1,000 bank notes to ease the impact following the withdrawal of Rs 2,000 notes, RBI governor Shaktikanta Das said today, calling reports on the subject "speculative".
"That's speculative. There's no such proposal right now," Mr Das said when asked whether there is a possibility of reintroducing Rs 1,000 notes.
The ₹ 2,000 banknote was introduced in November 2016 primarily to meet the currency requirement of the economy "in an expeditious manner" after the big demonetisation exercise, in which the legal tender status of all ₹ 500 and ₹ 1,000 banknotes in circulation at that time was withdrawn, the Reserve Bank of India has said. Rs 10 lakh crore was wiped out of circulation overnight because of the move.
"With fulfilment of that objective and availability of banknotes in other denominations in adequate quantities, printing of ₹ 2000 banknotes was stopped in 2018-19," RBI said.
Speaking to reporters for the first time since the surprise decision, Mr Das also said that no one should rush to return or exchange their ₹ 2,000 notes.
"There is no reason to rush to banks now. You have four months, till September 30," the RBI Governor said, adding that the deadline had been given mainly so people would take it seriously and make an effort to return the notes.
The impact of the withdrawal on the economy will be "very very marginal", he said, adding Rs 2,000 notes made up for just 10.8 per cent of the total currency in circulation.
"Rs 2000 bank notes were introduced primarily to replenish the notes withdrawn following demonstration," the RBI chief added.
Eighty-nine per cent of the ₹ 2,000 notes were issued before March 2017 and they are at the end of their estimated life span of four to five years, according to the central bank.
"The total value of these banknotes in circulation has declined from ₹ 6.73 lakh crore at its peak as on March 31, 2018 (37.3% of Notes in Circulation) to ₹ 3.62 lakh crore constituting only 10.8% of Notes in Circulation on March 31, 2023," RBI said.
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