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Recently in the year 2023 the Reserve Bank of India declared for the de-circulation of Rs. 2000 currency notes from the circulation in the country. This was a response to India’s latest demonetization, the removal of any currency from circulation.. Before this action a big step had been taken by the government of India in the year 2016 to suddenly removal the status of the of the Rs. 500 and Rs. 1000 currency notes not to be as the legal tender.
On 8 November 2016 at 08.00 pm the Prime Minister of India announced on the national TV for the demonetization of all banknotes of the denomination of Rs. 500 and Rs. 1000 notes of the Mahatma Gandhi Series with immediate affect. But by this immediate action of demonetization of the currency taken by the government had created havoc in the entire country.
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Under demonetization the Indian government withdrew Rs 500 and Rs 1000 notes worth Rs 15.44 lakh crore. This was about 88% of the total currency in circulation in the country. This immediate action by the Indian government led to cash shortage and liquidity crisis across the country. The general public was forced to stand in queues in front of banks and ATMs.
Well, this was not the second time for demonetization of any currency in India, but this was the 5th time in the history of the country when the Reserve Bank of India has taken such a measure. In the Independent India it was happen forth time. The first measure was taken in the year 1946 immediate after the World War 2 stop. If you wish to know all the demonetization of currency in India with their reasons. keep up with the article.
Complete List of Demonetization of Currency in India with Date and Reason
01) The action of Demonetization was taken place in 1946 –
– On 12th January 1946 the British Government and the Governor of RBI, Shri Chintaman Dwarakanath Deshmukh decided to demonetize the Rs.500, Rs.1,000 and Rs.10,000 notes from the circulation.
– The main aim was to curb the increasing black-market operations, which was accrue due to World War 2.
– The action of Demonetization of Currency was not taken by India only but several other countries like France, UK, Belgium, etc., had also taken such measures of demonetization of their currency.
– The Reserve Bank of India implemented this decision by issuing two ordinances.
– But again in the year 1954 the Reserve Bank of India reintroduced all these three denominations in the country.
02) Demonetization of Rs.1,000, Rs.5,000 and Rs.10,000 Notes in the year 1978
– In the year 1970 the Government of India decided to set up a direct tax inquiry to trace and prevent the spread of black money.
– The panel for direct tax inquiry is also known as “The Wanchoo Committee.”
– The direct tax inquiry was led by Justice Kailash Wanchoo.
– Justice Kailash Wanchoo was the former Chief Justice of India.
– In the year 1978 the Government of India headed by the Prime Minister Shri Morarji Desai decided to demonetise of Rs.1,000, Rs.5,000 and Rs.10,000 notes from the circulation.
– Demonetisation of Rs.1,000, Rs.5,000 and Rs.10,000 currency notes came into effect on 16th January 1978.
– This action was taken place under the Demonetization Ordinance 1978 (High Denomination Bank Notes )
– The Finance Minister of that time, Shri H M Patel said this measure would help combat anti-social elements and control illegal transactions in the country.
– But again in November 2000, new denomination of Rs. 1000 note had been reintroduced into circulation by the Atal Bihari Vajpayee Government.
03) Withdrawal of All the Currency Notes Issued Before 2005 in the year 2014 –
– On 22nd January 2014, RBI declared that all notes issued before 2005 would be withdrawn from the circulation.
– It was decided by the Reserve Bank of India that the general public can exchange such currency notes from the banks.
– The process of the exchange of the currency notes started from 1st April 2014 and was available till the further orders.
– The Reserve Bank of India had notified that those denominations did not have the year of printing on their reverse sides to help the general public to identify such currency notes.
– Reason revealed behind this action of the withdrawal of all the currency notes issued before 2005 by the Reserve Bank of India was the such currency nates had very few security measures compared to those issued after 2005.
04) Demonetization of Rs.500 and Rs.1,000 Notes in the year 2016
– 8th November 2016 is the date when the Prime Minister of India come on the national television and announced for the demonetization of the Rs. 500 and Rs.1000 notes of Gandhi series with immediate effect.
– The date 8th November 2016 was marked as a “Black Day” by almost all political parties. But the BJP celebrated the 8th November as “The Anti-Black Money Day”.
– By this action the currency notes of Rs. 500 and Rs. 1000 lost their validity with immediate affect which cause situation of chaos in the country.
– By this action almost 80% of the currency suddenly washed out from the circulation.
– The Prime Minister of India announced for the issuance of the new series of Rs.500 and Rs.2,000 banknotes.
– The Prime Minister of India assured the country that “this action would help curb black money and stop counterfeit and illicit cash being used for funding terrorist activities”.
05) Withdrawal of Rs.2,000 Notes from Circulation in the year 2023
– On 19th May 2023 the Reserve Bank of India made an announcement for the withdrawal of Rs.2,000 notes from the circulation.
– This action was done as a part of its ‘clean note’ policy.
– As per the announcement of the Reserve Bank of India that the general public could exchange their notes at banks or designated offices of RBI till 30 September 2023.
– To avoid the any chaos situation arise in the country like the demonetization of the year 2016, Reserve Bank of India also announced that Rs.2,000 notes will remain as a legal tender even after that date.
Conclusion
– All these Demonetization Dates, Reasons and Status in India are described. It is important for every student to know this to build his general awareness and at the same time every interested person should know about it.
– Such actions can be taken in future also to curb illegal financial activities.
– This type of action is in the larger interest of the people of the country and the economy as a whole.
– In such circumstances, every citizen should follow the rules set by the government and encourage others to do the same.
– The government will also have to think about not repeating the situation like 2016 in the country.
All the best for a brightest future.