Government may reintroduce new and improved Rs 1,000 note

Not just Rs 500 and Rs 2,000, the government will soon reintroduce the Rs 1,000 note back in the market, but with far more evolved security features.

Twenty four hours after Prime Minister Narendra Modi announced the demonetisation of the two high-value notes, a government source said once the issue size of Rs 2,000 has stabilised with the banking system, the Rs 1,000 currency note, too, will make a re-appearance.

The source, however, refused to discuss the details of the note, saying it would be like the new notes, slightly smaller than the original Rs 1,000 note - that is no more a legal tender.

For the time being, the decision to introduce Rs 500 and Rs 2,000 was made in view of the trend in inflation since the time Rs 1,000 was introduced in 1978. More than one committee was set up by the Reserve Bank of India to study the issue and it suggested that instead of a Rs 1,000 note, it was better to examine introduction of a higher denomination note. The decision was made accordingly.

But, the source said, the Rs 1,000 denomination will be necessary to maintain continuity in the currency series. As of now, the government is yet to decide on a timeline for the introduction of the third member in the high-value troika.