The recent decision by the Reserve Bank of India (RBI) to withdraw the Rs 2000 denomination notes, which were introduced after the 2016 demonetisation, has sparked discussions about the highest denomination ever used in India.
Contrary to popular belief that the Rs. 2000 note is the highest denomination ever used in India, it is worth noting that the country has also seen the existence of a Rs. 10000 note.
Paper currency was first issued in late eighteenth century
The issuance of paper currency in India dates back to the late eighteenth century. The Victoria Portrait Series introduced denominations of 10, 20, 50, and 100 rupees, marking the initial phase of Indian paper currency. In the series, Rs. 100 was the highest denomination.
Upon the establishment of the Reserve Bank of India on April 1, 1935, India saw the introduction of Rs. 1000 and Rs. 10,000 denomination notes in 1938. These high-value notes remained in circulation until 1946 when the government decided to demonetise them, marking the first-ever demonetisation in Indian history.
Highest denomination notes were last withdrawn in 1978
In 1954, high denomination notes, namely Rs. 1000 and Rs. 10,000, were reintroduced. However, in 1978, the Janata Party-led coalition government carried out the second demonetisation, once again banning these notes. This move marked the second instance of demonetisation in India.
Over time, India saw the reintroduction of Rs. 500 notes in 1987, followed by the introduction of Rs. 1000 notes in 2000. The Mahatma Gandhi (MG) series currency notes were issued in 1996, later replaced by the MG series 2005 currency notes.
The 2016 demonetisation, implemented on November 16, created significant controversy as it involved the demonetisation of Rs. 500 and Rs. 1000 notes, leading to a massive withdrawal of cash from the Indian economy. In response, new Rs. 500 and Rs. 2000 currency notes were introduced.
Rs. 2000 notes withdrawal leaves Rs. 500 as highest denomination
With the recent withdrawal of Rs. 2000 notes, India will now have the Rs. 500 note as its highest denomination.
Amidst the discussions, there have been speculations about the reintroduction of the Rs. 1000 note. However, RBI Governor Shaktikanta Das has dismissed such claims, stating that there is no such proposal as of now.
