The Reserve Bank of India has stopped printing ₹2,000 notes to prevent money laundering and address fakes, BusinessLine reports. An RTI query by the New Indian Express reveals the central bank hasn’t printed a single ₹2,000-denomination note since April. Counterfeiting of the ₹2,000 note jumped 22% y-o-y in 2018-19, even as the number of such notes in circulation declined, official data shows. Earlier this week, the National Intelligence Agency cited high-quality fake notes as one of six major emerging challenges.
This is utterly ridiculous. Why were these notes introduced, to begin with? It is pretty obvious when you introduce such a big denomination, that money laundering will be easier. Almost all aspects of the 2016 demonetisation can be explained or understood, except this. The ₹2000 note is as befuddling now as it was then.
Will the RBI (sometime in the future) take back the notes? Replace them with a smaller denomination? Nobody knows. The 2000 rupee notes were initially meant for government to government transactions only.
Some reports suggest that they decided to release a limited number for public use to fill the gap. The plan was to phase them out in 3 years time. A lakh rupees stored in Rs 2000 currency notes would take half the space of the same stored in Rs 1000 notes. It’s common sense. Counterfeiters have to produce half as many units. Same goes for tax evasion and money laundering operations.
So, in my opinion, it was a dumb idea to begin with to introduce Rs 2000 notes. It’s like giving launderers, counterfeiters, and tax evaders a massive Diwali gift every day of the year. Coming along with demonetization, it was like puncturing your boat twice even as you plug one leak.
This is another example of how confusing the government policies are on one hand and the people breaking the systems on the other. Banning 1000 rs notes to curb black money and introducing 2000 rs note is hard to understand. Law breakers have again find a way to circulate fake currency. This is a cat and mouse game where people themselves are unable to change systems and government solutions are not perfect. So always back to square one.