RBI’s decision to withdraw Rs 2,000 banknotes from circulation has come just over seven and half years since the economically adverse demonetisation of Rs 500 and Rs 1000 notes has triggered a sense of panic among the public.While PM Modi’s decision in November 2016 to suddenly ban the legal tender status of the then available high value currency note was apparently aimed at combating black money and terror funding, the RBI has announced that the move is in pursuance of its Clean Note Policy’ and does not alter the legal tender status of the withdrawn notes. The RBI decision only reinforces the view that the introduction of Rs 2000 note directly contradicted the claims made at the time by the government that note ban was a well thought out, effective and permanent strike against black money. Of course, the RBI retains the right to issue or withdraw currency bills as it deems fit for the conduct of its policy mandate, but the lack of transparency now, and not having learnt lessons from past episodes do little to enhance trust.
