The government on Wednesday was tight-lipped on whether the Rs 2,000 denominated notes were going to be demonetized. Despite repeated questioning from the opposition, finance minister Arun Jaitley preferred to ignore the questions and refused to be drawn into a discussion.
Bankers say that it is unlikely that the government would demonetize the high-value currency. They say the government and the Reserve Bank of India (RBI) may be rebalancing the supply of the currency. Initially, the government was printing more of Rs 2,000-denominated notes and is going slow now.
Bankers say that the fresh supply of Rs 2,000 denominated notes from RBI is gradually going down and fresh supplies of Rs 500 notes are taking place as the central bank tries to increase lower-denominated currency notes.
A senior banker said, "There are sufficient supplies of Rs 500 and Rs 100 but lower denominations are little scarce. The bulk of the notes we are receiving is the Rs 500 denominations."
RBI data shows that currency in circulation stood at Rs 15.22 trillion (lakh crore) as on July 14, eight months after demonetization. This is about 86% of the Rs 17.7 lakh crore that was in circulation on November 4.
However, bankers said, "There may not be a plan to demonetize the Rs 2,000 notes. They may be trying to rebalance the supplies. Initially, it was the Rs 2,000 notes that were getting printed to replenish the demonetized stock of currency. Now they may be going back to lower currency. "
Naresh Agrawal, a Samajwadi Party MP, said in the Parliament on Wednesday, "The government has taken a decision to scrap Rs 2,000 note. The RBI has been given order not to print the Rs 2,000 notes. If any policy decision been taken during the parliament session, the tradition is to announce it in the House," he said.
"So far, the RBI has printed 3.2 lakh crore pieces of Rs 2,000 notes. And now, it has stopped printing. RBI cannot bully. One note ban has been done, the second one is being planned. Let the finance minister reply," he added. But the finance minister chose not to respond.
