Many are unaware that high-denomination rupee notes like Rs. 5,000 and Rs. 10,000 once existed in India. This article delves into the history of these notes and the reasons behind their demonetization.
The highest denomination note currently in circulation in India is the Rs 500 note. Following the 2016 demonetization, the Rs 2,000 note, which was introduced as part of the government's efforts to combat black money, has been withdrawn from circulation. However, many people are unaware that India once had currency notes of higher denominations than Rs. 2,000, including Rs. 5,000 and Rs. 10,000 notes.
The Rs 10,000 note: India's largest denomination:
The Rs. 10,000 note holds the record for being the highest denomination currency ever issued in India. This note was initially circulated during the pre-independence era. However, in January 1946, the British government decided to discontinue the Rs. 10,000 note as a measure to curb the growing circulation of black money during World War II.
After India gained independence, high-denomination notes, including the Rs. 10,000 and Rs. 5,000 notes, were reintroduced in 1954. However, these notes did not last long. In 1978, the government decided to withdraw both the Rs. 10,000 and Rs. 5,000 notes from circulation once again. The decision was part of the government's continued efforts to tackle black money and economic irregularities.
Proposals for reintroduction of high-denomination notes:
There were discussions over the years about reintroducing high-denomination notes. Former RBI Governor Raghuram Rajan is said to have suggested bringing back Rs. 5,000 and Rs. 10,000 notes. However, he ultimately dropped the idea, citing various concerns.
In a surprising move, the Indian government, under Prime Minister Narendra Modi, announced the demonetization of Rs. 500 and Rs. 1,000 notes in 2016. This step aimed to curb the use of black money and counterfeit currency. To compensate, Rs. 2,000 notes were introduced, but their circulation was short-lived. By 2023, the Reserve Bank of India announced that Rs. 2,000 notes would also be withdrawn, leaving the Rs. 500 note as the highest denomination in circulation.