Rs 1000 note u-turn: Will Modi government bring it back; here is what has happened so far

By: | Updated: February 22, 2017 3:08 PM

Reports originated in the media that the RBI had finalised plans to launch a new series of Rs 1,000 notes to replace the once that had been withdrawn on November 8, 2016.

demonetisation, new 1000 notes introducted, Rs 1000 introduced, rs 1000 notes back? Reports further suggested that the new Rs 1,000 notes were supposed to be introduced in January, but had been delayed due to the need of supplying Rs 500 notes t replenish the vacuum created by note ban (PTI)

On November 8, 2016, Prime Minister Narendra Modi announced an overnight ban on the use of Rs 500 and Rs 1,000 currency notes. The move, which came to be known as the demonetisation drive was aimed to stop the use of high value currency denominations in order to curb down the flow of black money, which the government believed happened mostly in large transactions of cash. Later, the Narendra Modi-led central government reintroduced the Rs 500 note, albeit in a different outlay and design. The government further announced the emergence of Rs 2,000 notes. Now, the move was severely criticised just as the whole demonetisation drive was; it must be noted that the introduction of Rs 2,000 was necessary to fill in the void created in the economy by the ban on Rs 500 and Rs 1,000 notes. Meanwhile, as the demonetisation drive has effectively come to an end and the economy seems to be getting back on track, there have been speculations about the return of Rs 1000 currency notes to the market.

Let us take a look at what has happened so far:

1) PM Narendra Modi announced the ban on Rs 500 and Rs 1000 notes in an unprecedented move to curb the flow of black money in the country.

2) The move created a ruckus amongst the public as everybody was suddenly out of cash. The RBI had put restrictions on the withdrawal of money from banks and ATMs, leading to hours-long queues in front of them.

3) The entire opposition criticised the move saying that it had become about ‘one man’s ego’ and called the drive an unplanned mistake by the BJp government. Protests were held and marches were taken out as people stood in front of banks and ATMs for hours. The government asked the banks to be open till 8 in the night to ease the troubles of the common folk but crowds were still seen from 4 in the morning at most places.

4) At the end of 50 days of demonetisation, the RBI raised the withdrawal cap to an extent, easing some of the troubles for the common people.

5) The central government went ahead of its earlier narrative of coming down on corruption and black money and went for an ambitious goal of cashless economy.

Also watch:

6) Reports originated in the media that the RBI had finalised plans to launch a new series of Rs 1,000 notes to replace the once that had been withdrawn on November 8, 2016.

7) IE reported that although the dates for the introduction of the new notes wasn’t announced, the Reserve Bank of Indi had already started production.

8) Reports further suggested that the new Rs 1,000 notes were supposed to be introduced in January, but had been delayed due to the need of supplying Rs 500 notes t replenish the vacuum created by the decision on November 8, 2016.

9) Meanwhile, senior BJD leader Baijayant Panda was of the opinion that the supply of Rs 2,000 notes, which was necessary to replenish cash post demonetisation, should be stopped to make large cash transactions harder.

10) Economic Affairs Secretary Shaktikanta Das had said that the Centre had no plan to re-introduce Rs 1,000 notes and the focus of the government is on raising the production of Rs 500 and lower denomination currencies.

While, the reports have been conflicting and EAS Shaktikanta Das has clearly denied any such plans, it must be noted that during the demonetisation drive, the RBI and the centre did take some unprecedented steps for reasons unknown and anything remains possible.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition