Banking Central | Loathed more often than loved, here’s a parting note from Rs 2,000 notes

Dear citizens,

As we write this to you, only a handful of us are still in circulation — just about Rs 9,000 crore in worth — as against Rs 3.56 lakh crore in May 2023 when the Uncle Sam of Indian lenders, the Reserve Bank of India, decided that our time was up in the world.

To put it in other words, more than 97 percent of us are back in the system by now. To be precise, 97.38 percent of Rs 2,000 currency notes are back in the system, says the Reserve Bank.

But we are not declared dead yet. The Rs 2,000 banknotes continue to be legal tender, RBI says, though the reality has dawned on us and, we shall cease to exist among you very soon and may end up in the central bank archives. Well, every good thing has to come to an end!

Truth be told, we were not brought in for a long haul. We were a stop-gap measure to speed up remonetisation of the economy after my younger cousins vanished overnight in 2016. The Rs 1,000 and Rs 500 bills made about 86 percent of the currency in circulation then. Their disappearance had left the banking system in a state of disarray and the common man in a state of sheer panic.

Even our enemies would agree, we did our job reasonably well. We played a key role in addressing the huge currency shortage in the system over the next many months. But, you loathed us more than loving us, and the lovely magenta that we flaunt faded out soon because we were too heavy for your simple needs.

We know how shopkeepers, especially the retail market kirana shops, would shy away from us. Frowns and frustrations were commonplace whenever the teller machines burped out the Rs 2,000 bills because you always loved to deal in Rs 500 and Rs 100 notes.

Deepening the woes, the magenta found favour in black. Hoarders loved us stash away their undisclosed wealth. In November 2019, Finance Minister

Nirmala Sitharaman told Parliament that 43.22 percent of unaccounted cash seized in the financial year 2020 was in the form of Rs 2,000 notes. In the financial year 2018, the Rs 2,000 notes made up 67.91 percent of unaccounted cash, while the figure was 65.93 percent a year later. Consolidated data is not available for 2020-2022, but the trend is likely to be largely in line with the previous years.

Again, we were blamed for this! What’s our fault, anyway?

As if all these were not enough, fake currency rackets loved us too! They got their best copyists to replicate us. A major chunk of fake currencies seized in the last three years was in Rs 2,000 denominations, the media says. In 2021, the face value of these seized fake notes stood at Rs 4,84,78,000. As many as 2,44,834 fake notes of Rs 2,000 denomination were seized in 2020 as against 90,566,000 a year before.

In August 2022, in a written reply to the Lok Sabha, Minister of State for Finance Pankaj Chaudhary said 2,272 fake currency notes of Rs 2,000 denomination were seized in 2016; 74,898 in 2017; 54,776 in 2018; 90,566 in 2019; and 2,44,834 in 2020. Between 2019 and 2020, there has been a 170 percent rise in fake currency notes of Rs 2,000 denomination, the minister said. No wonder, we became a subject of political mudslinging with the Opposition accusing us of being a tool to help black money keepers.

As we count our days, we wonder did we do more harm to the economy than good?

Before calling it a day, we assure you that there’s no need to panic if you still hold of some us. Banks have kept their doors open to take us back, and we are still a legal tender and welcome at designated RBI offices. And, did you know that you can also send Rs 2,000 notes to RBI branches through any post offices in the country. So, nothing to worry.

Yours truly,

Rs 2,000 Currency Notes

Banking Central is a weekly column that keeps a close watch and connects the dots about the sector’s most important events for readers.