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RBI has substantially reduced printing of Rs. 2,000 notes in India.
What Is It?
The supply of Rs. 2000 notes in India have been limited down to a minimum recently by the RBI. The RBI and the government from time to time decide on the quantum of currency to be printed on the basis of money in circulation.
When the 2,000 rupee note came out post-demonetisation, it was decided that the supply would be scaled down going forward since the high-value currency note was meant for meeting the remonetisation.
Why Is It?
The central bank is scrapping the supply of the Rs. 2000 so as to prevent black money hoarders from hoarding the higher-value currency. Large value currency notes are easier to hoard and can be used for the proliferation of black money.
The proportion of Rs 2,000 notes in circulation has fallen to 37 per cent of the total currency from 50 per cent a year before. According to the RBI data, there were 3,285 million pieces Rs. 2,000 notes in circulation at March-end 2017. A year after, on 31 March 2018, there was only a marginal increase in that number to 3,363 million pieces.
Of the total currency in circulation amounting to Rs 18,037 billion on 31 March 2018, Rs 2000 notes accounted for 37.3%, down from 50.2% on 31 March 2017.