On Friday, the Finance Minister, Arun Jaitley has said that there is no plan to withdraw the Rs.2,000 denomination bank notes that were introduced post demonetisation. The Rs.2,000 banknotes were introduced along with new Rs 500 currency following the withdrawal of old Rs 500 and Rs 1,000 notes from November 9, 2016.

The Finance Minister said in a written reply to the Lok Sabha as quoted “There is no proposal to withdraw the Rs. 2,000 denomination banknote.” Mr.Jaitley further said that the Rs.500 and Rs.1,000 notes returned to the currency chests of the Reserve Bank of India (RBI) amounted to about Rs.12.44 lakh crore as of December 10, 2016.

Arun Jaitley

The Rs.2,000 banknotes were introduced along with new Rs 500 currency following the withdrawal of old Rs 500 and Rs 1,000 notes from November 9, 2016

He further added that the data obtained in this regard would need to be reconciled with the physical cash balances to eliminate counterfeit notes, accounting errors and possible double counts after which only the final figures will arrive at a conclusion. He said that as of March 3, 2017, Rs.12 lakh crore currency is currently in circulation. As of January 27, the currency circulation was Rs. 9.921 lakh crore.

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Mr.Jaitley said the cash recall seeks to create a new “normal” wherein the GDP will be bigger, cleaner and real. “The exercise is a part of the government’s resolve to eliminate corruption, black money, counterfeit currency and terror funding,” he added. “The exercise has resulted in an increase in deposits with banks, and this will facilitate reduction of interest rates and provide more headroom to banks to expand their credit base,” the minister added.

Following the demonetization, several restrictions were imposed on the withdrawal from banks as well as the ATMs. The notes were introduced along with the new denomination notes of Rs. 500, following the abandonment of old Rs.500 and Rs.1,000 notes from November 9, 2016. The restrictions have been gradually removed.