RBI takes away Rs 2,000 notes.
The Reserve Bank of India announced on Friday that the highest denomination currency note in circulation in India will be discontinued. The 2016-released 2,000-rupee note will continue to be accepted as legal cash, however individuals are urged to deposit or trade their notes by September 30, 2023.
The action is reminiscent of a shocking decision made in 2016 by the Narendra Modi-led administration, which saw 86% of the cash in circulation in the economy removed over night.
The government recalled the Rs. 2,000 notes for what reason?
In order to quickly refill the cash in circulation in the Indian economy after demonetisation, 2,000-rupee notes were issued in 2016.
The Reserve Bank of India explained its decision to discontinue these notes in its message by stating that this denomination is not frequently utilised for transactions.
But....Why..Now ?⇄
While the government and the central bank did not specify the reason for the timing of the move, analysts point out that it comes ahead of state and general elections in the country when cash usage typically spikes.