No move to ban 2K notes

New Delhi: Union Finance Minister Arun Jaitley has said that the government is not considering banning Rs 2,000 notes, while stating that the Reserve Bank of India (RBI) will decide when to issue new Rs 200 note that has been notified.

Asked whether the government is considering the phasing out of newly introduced Rs 2,000 notes, Jaitley told reporters here after a meeting of the Cabinet on Wednesday: "No, there was no such discussion."

“The Central government is preparing to gradually phase out the new Rs 2,000 note. The government is also preparing to bring in laws to take penal action against hoarders of the new Rs 2,000 note,” says a report quoting people in the know of the development.

The report adds that the idea behind introduction of the high denomination Rs 2,000 currency was to quickly remonetise the economy. Once the cash vacuum that demonetisation had created is filled, the requirement for a currency of that high a value will no longer make much sense.

On the Rs 200 notes notified by the government on Wednesday, Jaitley said the RBI would decide on the matter. "The whole process regarding when the notes will be printed, the RBI will take care of that issue.

Thus, it will be appropriate for the RBI to announce about dates and matters related to the note printing," Jaitley said. Speculations, rumours and hoax photos of the Rs 200 note have been floating around for a while, but the real deal is finally here with the Finance Ministry formally announcing on Wednesday the launch of the new Rs 200 note.

Earlier, Union Minister of State for Finance Santosh Kumar Gangwar said the Rs 200 note, printing of which had begun, would be in circulation soon. The move to introduce the new currency was to increase the circulation of smaller denomination notes. "There is no other denomination available between Rs 100 and Rs 500, and the RBI is expecting Rs 200 notes to become very popular and that's why it is taking every step to ensure availability of it," a source said.