Won’t have impact on economy, says T V Somanathan

The Reserve Bank of India on Friday announced the withdrawal of the Rs 2,000 currency note — which was introduced during the demonetisation exercise in 2016 — from circulation, citing its ‘Clean Note Policy’, which aims to remove damaged, counterfeit, or soiled notes from circulation, and lack of usage.

Finance Secretary T V Somanathan spoke to Shrimi Choudhary in New Delhi on why the step was taken. Edited excerpts:

Why is Rs 2,000 note being withdrawn?

It has outlived its purpose, especially with the growth of digital transactions at payment systems. It was introduced for a quick circulation after the [2016] demonetisation, and it has served its purpose. Now there is no need to have a high-denomination note keeping in view the spread of electronic transactions.