New Delhi: Finance Minister Nirmala Sitharaman on Wednesday said that no instructions have been given to banks on stopping issuing notes of Rs 2000 denomination.
"As far as I know, no such instruction has been given to the banks (on stopping issue of Rs 2000 notes)," she said at a meeting with heads of PSU banks.
The Minister's comments come after reports of ATM recalibration to phase out of Rs 2,000 notes and that the largest currency denomination will remain legal tender, but would be gradually phased out of public circulation.
Banks have started dispensing more of Rs 500 notes than Rs 2,000 denomination notes, a move seen as gradual phasing out of the high denomination currency note.
The Reserve Bank of India (RBI) in an RTI response last year had said that the central bank had stopped printing Rs 2,000 denomination currency notes.
Although there has been no dictate from the Finance Ministry, banks on their own have decided to fill their ATMs with smaller denomination notes for the convenience of customers, sources said.
Some banks have already started recalibration of their ATMs and other banks will also follow the suit, sources said.
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State-owned Indian Bank has already announced that its has decided to stop using Rs 2,000 notes in their ATMs.
Getting change for a Rs 2,000 note has become an issue and due to that some banks have stopped using Rs 2,000 notes in their ATMs, sources said.
According to the RBI's RTI reply, 3,542.991 million notes of Rs 2,000 denomination were printed during 2016-17.
However, 2017-18 saw a substantial reduction in printing and only 111.507 million notes were produced, which further reduced to 46.690 million notes in 2018-19.
This indicates that while these high denomination notes would continue to be a legal tender but will be phased out eventually.
The move is seen as an attempt to prevent hoarding of the high-value currency and thus, curb black money. The government had in November 2016 demonetised Rs 1,000 and Rs 500 denominations notes.
Replying to a question in Parliament, Minister of State for Finance Anurag Singh Thakur in December said there is no proposal to withdraw Rs 2,000 denomination notes.
Previously, in a news conference in Hyderabad when Sitharaman was asked to comment on reports that the circulation of Rs 2,000 notes were being restricted, she said "I am not aware of any such measure." She said it was not proper for her to respond to allegations.
(PTI and IANS Report)
