The Centre on Thursday said it would also replace the smaller denomination currency notes of Rs.50 and Rs.100, incorporating new features and design.
Secretary, Economic Affairs, Shaktikanta Das, said the new currency notes will be gradually infused in the system while slowly phasing out the old series. New Rs. 1,000 denomination notes, with enhanced security, will be in circulation soon, he said.
“The Reserve Bank of India (RBI) is going to monitor the release of the Rs.2,000 notes, and in due course, (and) within a few months, the Rs. 1,000 note will be reintroduced into the market with completely new dimensions, new design and new color from the old one,” Mr. Das said at the Economic Editors Conference.
“The RBI had initially said that looking at the way inflation is progressing, it should introduce Rs. 5,000 and Rs. 10,000 notes,” Finance Minister Arun Jaitley said at the conference.
“But the government did not agree . The reason we decided on Rs. 500 and Rs. 2, 000 is because of the handling convenience, and once all the money is in the banking system, then there won’t be any incentive to again convert it to black.”
The Finance Minister also promised that nobody would face any questions or harassment for small deposits made in banks.
“There has been an Indian tradition to keep small amounts of cash at home for exigencies and emergencies,” Mr. Jaitley added.
“They can exchange that and deposit it in their accounts and the revenue department is not going to take notice of these small depositors. It’s only those with large amounts of undisclosed money who will have to face the consequences under the tax laws.”
The Reserve Bank of India has issued an instruction to banks to ensure that no ATM dispense Rs. 1,000 or Rs. 500 denomination bank notes. ATM counters will re-start functioning from Friday and will dispense only Rs. 50 and Rs. 100 notes.