FM Jaitley puts end to speculations over Rs. 2,000 notes

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Gandhinagar.  Union Finance Minister Arun Jaitley on Friday put an end to all rumors about the Reserve Bank of India (RBI) holding back Rs. 2000

“Many such rumors are being spread, which are wrong. Don’t believe such things till any official announcement is made,” the Finance Minister said.

Earlier, a State Bank of India (SBI) research report had noted that the RBI may either be holding back Rs. 2000 notes or could have already stopped printing it.

The report titled “Are Rs 2,000 high denomination notes being held back?” juxtaposed data presented in the Lok Sabha recently with the latest RBI Annual Report to arrive at this conclusion.

Comparing the data presented in the Lok Sabha recently with the one provided by the RBI in its annual report earlier, the report, authored by the bank’s chief economist, Soumya Kanti Ghosh, cited, “we observe that the value of small denomination currency in circulation up to March 2017 was Rs 3,501 billion. This implies that the value of high denomination notes was equivalent to Rs 13,324 billion as on 8 December, after netting out the small denomination notes from the currency in circulation on that day, it said.”

The report further added according to Ministry of Finance, the RBI has printed 16,957 million pieces of Rs 500 notes and 3,654 million pieces of Rs 2,000 notes as on 8 December. The total value of such notes translates into Rs 15,787 billion.

“This indicates that the residual amount of 2000 rupee notes of Rs 2,463 billion may have been printed by the RBI but not supplied in the market.”

The report also averred that, “it is safe to assume” that Rs 2,463 billion may be on the lower side as the RBI must have printed notes of small denomination in the interregnum (Rs 50 and Rs 200).

Ghosh also said that as the rupee 2,000 denomination led to challenges in transactions, it ‘seemed that RBI may have either consciously stopped printing’ these notes ‘or is printing them in smaller numbers after the initial print run to normalise the liquidity situation’.

Cr:ANI

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