Rs 2,000 notes not being phased out: Nirmala Sitharaman

Setting speculations at rest about the fate of Rs 2,000 currency notes, Finance Minister Nirmala Sitharaman Thursday said that those notes are here to stay and that the banks have not been given any instructions either to withdraw or recalibrate their ATMs to phase out such high denomination notes gradually.

“The banks have not been given any such instructions as far as Rs 2,000 currency notes are concerned,” the Finance Minister said to a pointed question about certain media reports saying ATMs are being rebooted to accommodate more Rs 500 denomination notes as a prelude to phase out the Rs 2,000 notes.

The Minister said this in Guwahati, where she is holding a series of meetings with economists, industry leaders and other stakeholders on the budget she presented on February 1.

There were speculations that the largest denomination currency notes may be taken out of circulation sooner than later.

Rs 2000 notes were introduced by the Reserve Bank of India (RBI) after November 2016 demonetisation of Rs 500 and Rs 1,000 notes. Soon, the highest denomination notes became the favourite currency for hoarders who stashed unaccounted cash.

Late year, Sitharaman had told Parliament that over 43% of unaccounted cash seized in this year were in the form of Rs 2,000 notes.

But closer to the third anniversary of demonetisation, former finance secretary Subhash Chandra Garg had made a case for demonetising the Rs 2,000 notes, which he said could be done without causing any disruption.

He had also said that majority of these notes were not in circulation since they were being hoarded.