India has stopped printing of Rs 2,000 note in order to reduce its circulation, say media reports.
A report published on Thursday by ThePrint quoted highly-placed government source as saying that the cut in circulation does not mean the Rs 2,000 notes will become invalid.
It has been reported that in all likelihood, the denomination will be gradually phased out.
The decision to stop printing the Rs 2,000 note comes on the back of suspicion in the Narendra Modi Government that the high-denomination banknote was being used for hoarding, tax evasion and money laundering.
The report, however, claimed that the RBI, India’s central bank and currency-issuing agency, did not respond to an email from ThePrint seeking comment.
It may be mentioned that the Rs 2,000 note was introduced in November 2016, after the Government decided to demonetise Rs 1,000 and Rs 500 notes as a crackdown on black money.
In order to counter the massive cash shortage, the Central Government flooded with new Rs 2,000 notes.
However, in the beginning, the people found it tough to make transactions with Rs 2,000 notes as the market had crisis of lower denomination notes with the ban on Rs 500 and Rs 1000 notes.
People in large numbers were seen in making queues in front of the bank ATMs across the country including the Northeast.
After the introduction of the Rs 2,000 note, the Narendra Modi Government was criticised for bringing out a note of such a high denomination considering it had cancelled the Rs 1,000 note.
According to the report, as of March 2018, the total value of the currency in circulation was Rs 18.03 lakh crore, of which Rs 6.73 lakh crore, or 37 per cent, was in Rs 2,000 notes, and Rs 7.73 lakh crore, approximately 43 per cent, in Rs 500 notes.
The remaining was in the lower denominations, the report said.
Following introduction of the Rs 2,000 note, the Opposition parties had argued that the Rs 2,000 note would further help money launderers and tax evaders, and backfire on one of the Government’s stated aims for demonetisation — checking tax evasion and money laundering.
As per the report, the squeeze in the circulation of the Rs 2,000 notes started recently.
The RBI’s annual report, released in August last year, showed that only 7.8 crore notes of the Rs 2,000 denomination were added in 2017-18 and as of March 2018, the total number of bills in circulation was 336.3 crore.