Delhi: You will be surprised to know that RBI decided to withdraw Rs 2000 note saying that there is no need for bigger notes, but a few years ago the same RBI had suggested printing bigger notes of Rs 5000 and Rs 10,000. The then RBI Governor Raghuram Rajan suggested central government to issue notes of 5,000 and 10,000 rupees in October 2014. Argument of Raghuram Rajan behind the suggestion was that due to rising inflation in the country, the value of 1000 rupee note was being eroded.
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Raghuram Rajan recommended to print big notes in order to control the rising inflation, In October, 2014 former RBI Governor Raghuram Rajan advised Modi government to issue notes of 5,000 and 10,000 rupees. But, Modi government at the Centre refused to accept the suggestion of RBI Governor.
Later, Arun Jaitley, then finance minister, had said that the government did not accept the recommendation for Rs 5,000 and Rs 10,000 notes as it wanted replacement currency available immediately, and so decided to go for Rs 2,000 notes. Rajan had later said it was difficult to have currency notes of bigger denominations due to fear of counterfeiting. Rajan said in September 2015,”Given that we are in a somewhat difficult neighbourhood, there is some concern on the extent of forgery that will take place if we do too large value notes.”
The government informed the RBI, in May 2016, about its “in principle” decision to introduce a new series of Rs 2,000 notes, and the printing presses were finally given instructions in June 2016.
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