Two years since injecting the new and highest currency of India post-demonetisation, the government has now stopped printing Rs 2000 notes to gradually stop the circulation of these legal tenders.
In November 2018, PM Narendra Modi announced a sudden overnight ban on usage of old Rs 500 and Rs 1000 notes in India, illegalising over 80 percent of the country’s cash flow with a purpose of curbing black money. To counter the massive cash shortage in country post demonetisation within short timeframe, the government had introduced new Rs 2000 notes. Within two years, the total value of the currency in circulation was recorded to be Rs 18.03 trillion, of which Rs 6.73 trillion, or 37 percent was covered by Rs 2000 notes.
Since the introduction, there was a speculation that such a high-valued denomination would further help money launderers and tax evaders, and would actually backfire the core purpose of demonetisation – that was to fight black money. These fears seemed to have turned into a reality after the PNB Nirav Modi bank fraud case after which, the government suspected cash stocking and the IT department reported massive seizures of Rs 2000 notes during this period.
Today, the government announced that they have decided to stop the printing of the Rs 2000 notes on suspicion that the banknote was being used for hoarding, tax evasion and money laundering. The purpose of stopping the print of the currency notes is to eventually reduce their circulation and cut off all the risks – so better not save too many pink notes.