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Rs 1000 notes won’t be reintroduced, says finance ministry

LiveMint logoLiveMint 29-08-2017 PTI

New Delhi: Within days of introducing new Rs 200 notes, the finance ministry on Tuesday ruled out reintroduction of Rs 1000 notes that were scrapped as part of the demonetisation move last November.

“There is no proposal to reintroduce Rs 1000 note,” said economic affairs secretary Subhash Chandra Garg in a tweet.

The statement comes amid reports that the government may reintroduce Rs 1000 notes.

The government had announced the withdrawal of old Rs 500 and Rs 1000 currency notes on 8 November 2016, with an aim to check black money, fake notes and terror financing.

On August 25, the Reserve Bank of India (RBI) launched a bright yellow Rs 200 note to ease pressure on lower-denomination currency bills and also fill the “missing link” between Rs 100 and Rs 500 currency.

Post demonetisation, RBI had introduced Rs 2000 notes and also issued new Rs 500 bills with additional security features.

Besides Rs 200 notes, Rs 50 notes with a new look were also introduced earlier this month.

The central bank has already announced that it would be ramping the supply of Rs 200 notes. The optimal system of denominations of currency (coins and notes), the RBI had said, is one that would minimise the number of denominations and concurrently increase the probability of proffering exact change.

“So, what should be the optimal mix of currency denominations? Many countries have opted to use a near variation of the Renard Series, i.e., 1:2 or 1:2.5 ratio between adjacent denominations of currency, which means that the denomination should be twice or two and half times of its preceding denomination,” the central bank had said. Such a ratio allows exchange of value ordinarily in a maximum of three denominations, it added.

Last week, finance minister Arun Jaitley had said that the government was not considering banning Rs 2000 notes.

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