'Expected decision': Ex-Principal Secretary explains the purpose behind short-term introduction of Rs 2,000 note

Former principal secretary to Prime Minister Narendra Modi, Nripendra Misra, said that when demonetisation was planned, PM Modi had one thing clear in his mind, which was that the Rs 2,000 note was going to be a temporary solution. Misra, who oversaw the demonetisation in 2016, said that PM Modi had a vision of slowly discontinuing the Rs 2,000 note from circulation.

"When the demonetisation was planned, one thing that was very clear in the PM’s mind was that the Rs 2,000 note was going to be a temporary solution. It was an expected decision. PM Modi had a vision of slowly discontinuing the Rs 2,000 note from circulation,” he said in an interview with India Today.

His comment came after the Reserve Bank of India (RBI) said that it plans to withdraw Rs 2,000 notes from circulation as part of the clean note policy.

On May 19, the central bank after announcing the withdrawal, said that people can deposit or exchange the notes at bank branches or designated RBI offices till September 30. The RBI has clarified that even after its withdrawal, the Rs 2,000 note will remain legal tender.

The decision to remove Rs 2,000 currency notes from the system was taken somewhere back in 2018, Misra said.

Moreover, when asked, if the withdrawal was to curb black money, he said, “This is one purpose. Those who have black money, they stash it in high denominations."

"And this is one reason why it cannot last long in circulation. The introduction of Rs 2,000 note had only one purpose, which was to fill the gap of the sudden requirement for cash that developed after the demonetisation," he stated.

Meanwhile, the State Bank of India (SBI) informed all its branches that no form and no identity proof are required to exchange Rs 2,000 notes.

"The facility of Rs exchange of Rs 2,000 to all members of the public upto a limit of Rs 20,000 at a time will be allowed without obtaining any requisition slip," the bank said in a circular dated May 20. "Further, no identity proof is required to be submitted by the tenderer at the time of exchange."  

(With inputs from Akshay Dongare)

Also Read: Rs 2,000 note withdrawal: Large retailers, traders see red; small merchants expect bump in biz

Also Read: No form, no identity proof required to exchange Rs 2,000 notes, SBI informs branches