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Modi second PM to scrap high-value notes, first to introduce Rs 2000 note

Narendra Modi is the second Indian Prime Minister to demonetise high-value rupee notes in independent India. But he will be the first PM to introduce the Rs 2,000 note.

black money crackdown Updated: Nov 09, 2016 17:46 IST
Saubhadra Chatterji
Saubhadra Chatterji
Hindustan Times
Rs 1000,Rs 500,Narendra Modi
People take selfies with Prime Minister Narendra Modi in New Delhi on November 3, 2016. (PTI)

Narendra Modi is the second Indian Prime Minister to demonetise high-value rupee notes in independent India. But he will be the first PM to introduce the Rs 2,000 note.

In 1978, the then Prime Minister Morarji Desai had banned all currency above Rs 100.

In both instances, it was the menace of black money that had compelled the government to scrap the existing high-value currency notes.

On Tuesday, Modi announced that the current 500 and 1000 rupee notes will not be valid from midnight. Instead, he said they were being replaced with new notes of Rs 500 and 2000.

Hindustan Times front page on January 17, 1978, when the Morarji Desai government withdrew currency notes of Rs 1,000, Rs 5,000 and Rs 10,000.

The highest currency note ever printed by the Reserve Bank of India (RBI) was a Rs 10,000 note during the British Raj. It was printed first in 1938 and a new version came in 1954.

According to RBI data, these notes were demonetised in January 1946 and again in January 1978.

When Desai came to power, banknotes of Rs 1,000, Rs 5,000 and Rs 10,000 were in circulation. But the PM, who also held the finance portfolio, demonetized all these notes in January 1978.

During the Atal Behari Vajpayee era, the Rs 1,000 note made a comeback. In November 2000, these notes were re-introduced on the ground that it would be easier for business transactions. The Rs 500 notes had already returned into circulation in October 1987. The move was then justified as an attempt to contain the volume of banknotes in circulation due to inflation.

Noteworthy details

Bank notes in the Ashoka Pillar watermark series in Rs 10 denomination were issued between 1967 and 1992, Rs 20 in 1972 and 1975, Rs 50 in 1975 and 1981 and Rs 100 between 1967-1979.

The banknotes issued during this period contained the symbols representing science and technology, progress and orientation to Indian art forms.

In the year 1980, the legend Satyameva Jayate -- ‘truth alone shall prevail’ -- was incorporated under the national emblem for the first time.

In October 1987, the Rs 500 banknote was introduced with the portrait of Mahatma Gandhi and Ashoka Pillar watermark.

The Mahatma Gandhi banknote series - 1996 were issued in the denominations of Rs 10, Rs 100 (June 1996), Rs 50 (March 1997), Rs 500 (October 1997), Rs 1,000 (November 2000), Rs 20 (August 2001), and Rs 5 (introduced in November 2001).

The Mahatma Gandhi Series - 2005 bank notes were issued in the denomination of Rs 10, Rs 20, Rs 50, Rs 100, Rs 500 and Rs 1,000 and contained some additional/new security features as compared to the 1996 series.

The Rs 50 and Rs 100 banknotes were issued in August 2005, followed by Rs 500 and Rs 1,000 denominations in October 2005 and Rs 10 and Rs 20 in April 2006 and August 2006, respectively.

(with PTI inputs)

First Published: Nov 09, 2016 01:01 IST