Key Points
In November 2016, Prime Minister Narendra Modi shocked the world by outlawing the 500 ($6) and 1,000 rupee bills in which the country held 86% of its cash..
Since it accounts for only 11% of the currency in circulation, and people have until Sept. 30 to change them into other denominations, its not as big a problem as the draconian ban back then..
Bengt Holmstrom, the Massachusetts Institute of Technology economist most commonly associated with that idea, won the Nobel Prize less than a month before Modis ill-advised ban drowned people in a quagmire of uncertainty: Can I deposit my money at the bank, and until when?.
The Reserve Bank of Indias handling of the 2016 chaos earned it the moniker of Reverse Bank of India, as it changed its circulars on what to do with old cash faster than people could obtain new money..
If tax cheats were hoarding their wealth in 500 and 1,000 rupee denominations, which were the biggest back in 2016, why did India even print the 2,000 rupee bill?.
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