Demonetisation day: Journey of Rs 2,000 note, from secret chip to pink slip

“Demonetisation” — the mere mention of the word is still enough to send a shiver down many a spine. Especially of those who spent countless hours standing in serpentine queues outside ATMs or banks exactly seven years ago, desperately trying to get their Rs 500 and Rs 1,000 notes deposited or exchanged because the government decided to demonetise them overnight.

But, soon after November 8, 2016, a “celebrity” made a gala entry into the Indian economy — the Rs 2,000 note. From being part of what was then hailed as “Modi’s masterstroke”, the coveted pink note, which was even rumoured to be armed with a “nano-GPS chip”, fell from grace in a mere seven years and was unceremoniously handed the “pink slip” in May this year. Its days are numbered.

Hype over “super-note”

Even as people get the final option to mail their Rs 2,000 notes by post to RBI or deposit these at certain RBI branches, it’s amusing to recall the hoopla that took over the media and social media when demonetisation was announced and the pink notes were introduced. As millions made a dash for the banks, news channels and fans of the Prime Minister could not stop gushing about the apparent “masterstroke” that was meant to do four things — curb black money, check terror funding, rein in corruption, and stop the printing of counterfeit currency.

While many scratched their heads in bewilderment over how the bolt from the blue — that many sarcastically called “demonisation” and the Opposition termed “notebandi” — would achieve all that, some media channels claimed the new high-value notes were embedded with “nano-GPS chips” that would help the government track all suspicious transactions and swoop down on the perpetrators. A news anchor even went the whole hog and “demonstrated” with the help of an oversized replica of the “super-note” where the chip would be embedded and how it would “track” criminals.

Fact-checkers worked furiously to prove that these were all rumours. It was a mere paper note and nothing more.

On May 19 this year, when the RBI announced the decision to scrap the Rs 2,000 notes, the central bank explained that they had served their purpose. The RBI had introduced the note under Section 24(1) of the RBI Act, 1934, which allows it to issue notes of denominations not exceeding Rs 10,000, mainly to meet the currency requirement of the economy speedily. The overnight demonetisation posed that requirement.

Demonetised in turn

Once banknotes of other denominations were in circulation in the economy in adequate quantities, the RBI stopped printing the Rs 2,000 rupee notes in 2018-19, the central bank explained. The exit of the pink note was less humiliating than its predecessors, the old Rs 500 and Rs 1,000 notes, which were veritably kicked out overnight.

It was less painful for the people too. There was no race to the ATMs, no cost-cutting at weddings, no painful stories of people losing their hard-earned money saved in demonetised notes, or brawls breaking out outside banks. People got four months to get their Rs 2,000 notes exchanged at banks, with the RBI later extending the deadline from September 30 to October 7. More to the people, very few people had very few Rs 2,000 notes on hand. The pink notes had suffered a slow death.

Recently, it has made it clear that the Rs 2,000 notes will continue to be legal tender and people can still get them exchanged at select RBI branches or mail them to the central bank. The RBI also said that the notes were withdrawn under its “Clean Note Policy” introduced in 1999. The policy is to provide quality currency notes as soiled ones are withdrawn out of circulation.

So, seven years on, life has come full circle for the people of India and the Rs 2,000 "super-note". With the pink notes bidding goodbye for good, the demons of demonetisation can also perhaps be put to rest. Somewhat.