India once had a Rs 10,000 note. Know why it was discontinued

Many people today may be familiar with Rs 2,000 as the highest denomination note in India, especially after the demonetisation in 2016.
However, there was a time when even larger denominations, including Rs 5,000 and Rs 10,000 notes, were in circulation. This lesser-known chapter of India’s monetary history offers insight into the country’s financial evolution.
The history of India’s Rs 10,000 note dates back to the pre-independence era. In 1938, the Reserve Bank of India (RBI) issued its first Rs 10,000 note, the largest denomination ever printed in the country.
This high-value currency was primarily used by traders and businesses for large transactions, as personal use of such large amounts was not common.
However, in January 1946, the British government decided to demonetise the Rs 10,000 note. The move was aimed at curbing hoarding and black-market trading, which had become rampant during World War II.
Despite this, the Rs 10,000 note made a comeback in 1954, once again being circulated in India along with other high-denomination notes like the Rs 5,000 note.
The story of the Rs 10,000 note took another turn in 1978 when it was permanently demonetised by the Indian government. By then, India had gained independence, and the Rs 5,000 and Rs 10,000 notes were still in circulation. However, these large denomination notes were not widely used by the general public.
The demonetisation in 1978, announced by then-Prime Minister Morarji Desai, was aimed at curbing the illegal use of large sums of money.
High-denomination notes were primarily being used by traders and in black-market activities, rather than for everyday transactions. The government believed that removing these notes would help reduce financial malpractice.
At the time, the impact of the demonetisation was minimal. According to estimates from the Reserve Bank of India, as of March 31, 1976, the total amount of cash in circulation was Rs 7,144 crore.
Of this, Rs 1,000 notes accounted for Rs 87.91 crore, which was just 1.2% of the total currency in circulation.
The value of Rs 5,000 notes was Rs 22.90 crore, while Rs 10,000 notes, numbering only 1,260, were worth Rs 1.26 crore. Altogether, these high-denomination notes made up less than 2% of the total currency in circulation at the time.
Interestingly, the possibility of reintroducing the Rs 5,000 and Rs 10,000 notes was considered in recent years. Former RBI Governor Raghuram Rajan had recommended bringing back these high-value notes. However, this idea was not implemented.
In 2016, during the demonetisation of Rs 500 and Rs 1,000 notes, the government chose to introduce Rs 2,000 notes instead of the suggested Rs 5,000 and Rs 10,000 denominations.
According to the late Arun Jaitley, who was the finance minister at the time, the government needed replacement currency to be available immediately. Rs 2,000 notes were seen as a more practical solution because they could be produced and distributed quickly, helping ease the cash crunch caused by demonetisation.