₹10000 note was first introduced in the country in 1938Image Credit source: Reuters

Right now the biggest note in India is ₹ 2000. RBI has now started the process of taking it out of circulation and these notes are being changed across the country. But do you know that there was a time before and after independence when the biggest note in the country was ₹ 10000, and former RBI Governor Raghuram Rajan also wanted to bring 5,000 and 10,000 rupee notes. What was the reason after all?

Raghuram Rajan was made the RBI governor in the Manmohan Singh government. He remained in this post from 2013 to 2016. Although it was expected that he would get a second term, the Modi government appointed Urjit Patel as the new governor in his place.

Rajan had a plan to bring ₹10000 note

The Reserve Bank of India informed the Parliament’s Public Accounts Committee (PAC) that a proposal to introduce Rs 5,000 and Rs 10,000 notes was prepared in October 2014 when Raghuram Rajan was the governor. The reason for this was the loss of value due to the inflation of the biggest note of Rs 1,000 at that time.

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However, this proposal did not go ahead. Rather, 18 months later, in May 2016, the government informed the RBI that it was “in principle in favor” of launching a new note series of Rs 2000 denomination. At the same time, in June 2016, orders were given to print new notes of Rs 2000.

Then the Finance Minister of the country was Arun Jaitley. He had said that the government has not accepted the proposal to print ₹ 5000 and ₹ 10000 notes. Rather, it has been agreed to print ₹ 2000 notes to exchange currency with immediate effect.

Rajan agreed that fake currency is increasing

Regarding this idea, Raghuram Rajan later admitted that due to the presence of large amount of notes in the economy, the possibility of their fake notes coming into circulation was high. This would harm the economy. Anyway, the problem of fake notes coming from neighboring countries of India is very big.

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This was the reason for bringing ₹10000 note

At the time of Manmohan Singh’s government, the level of retail inflation within the country had crossed 10%. That’s why Raghuram Rajan had planned to launch ‘big notes’. When Raghuram Rajan became the RBI governor, inflation in the country was at 10.7 percent, which almost halved by the time he left office.

Let us tell, the first ₹ 10000 note was introduced in the country in 1938, which remained in circulation till 1946. After this it was launched again in 1954 and it closed in 1978.