Rs 2,000 note scrapped: Won't have impact on economy, says T V Somanathan

The Reserve Bank of India on Friday announced the withdrawal of the Rs 2,000 currency note — which was introduced during the demonetisation exercise in 2016 — from circulation, citing its ‘Clean Note Policy’, which aims to remove damaged, counterfeit, or soiled notes from circulation, and lack of usage.

Finance Secretary T V Somanathan spoke to Shrimi Choudhary in New Delhi on why the step was taken. Edited excerpts:

Why is Rs 2,000 note being withdrawn?

It has outlived its purpose, especially with the growth of digital transactions at payment systems. It was introduced for a quick circulation after the [2016] demonetisation, and it has served its purpose. Now there is no need to have a high-denomination note keeping in view the spread of electronic transactions.

 

What impact will the move have on the economy?

There will be no impact as these notes are not largely used for transactional purposes anyway.

How much is the circulation at present?

I don’t have the data.