A viral video circulating on social media recently claims that the Indian government will demonetize the ₹500 note from March 2026. This news has caused confusion and anxiety among the public.
New Delhi: A video circulating rapidly on social media claims that the ₹500 note will be demonetized from March 2026. This news has created panic and confusion among the general public. The video alleges that the government is planning to gradually remove this high-denomination note from circulation to promote digital transactions. However, the government has now issued an official response.
What is the Truth?
- Both the government and the Reserve Bank of India (RBI) have completely dismissed this claim.
- PIB Fact Check, the government's official fact-checking unit, clarified that:
- The ₹500 note is still legal tender.
- There are no plans to remove it from circulation.
₹500 Note: Current Status
Following demonetization in 2016, the Indian government and the RBI issued new ₹2,000 and ₹500 notes. While the ₹2,000 note was later withdrawn, the ₹500 note remains the highest denomination currency in the country. Currently, the ₹500 note constitutes approximately 41% of the total currency in circulation by quantity and about 86% by value. This indicates its widespread use in daily transactions.
Rumors Spread by a Viral Video
A recently viral 12-minute YouTube video claimed that the government will phase out the ₹500 note from March 2026. The video has been viewed over 500,000 times, causing confusion and concern. The rapid spread of this news on social media raised questions among the public about whether the ₹500 note would meet the same fate as the ₹2,000 note.
What Did the Government and RBI Say?
Addressing these rumors, the government's official fact-checking unit, PIB Fact Check, clarified that the ₹500 note is completely valid and in circulation. An official post stated:
- The ₹500 note has not been demonetized and remains legal tender. Verify any such news with official sources before sharing.
- No official notification regarding demonetization or removal of the ₹500 note from circulation has been issued by the Ministry of Finance or the RBI.
- Understanding the government's policy on digital payments and smaller denominations in detail:
Government Focus
Finance Minister Nirmala Sitharaman recently clarified at an event that the government's priority is to promote digital transactions and encourage the use of lower denomination notes.
- Why is this policy necessary?
- Transactions become transparent.
- Tax collection improves.
- Cash dependency decreases, also reducing counterfeit currency issues.
- The use of smaller notes facilitates:
- Ease in everyday purchases.
- Maintains market equilibrium and improves cash flow.
- The digital payment ecosystem is being strengthened to encourage more cashless transactions.
- However, it has been observed that a significant number of people, especially in rural areas and small businesses, still predominantly use ₹500 notes.
Monetary System Post-Demonetization
- Following the 2016 demonetization, India's monetary system underwent significant changes. Old ₹500 and ₹1,000 notes were withdrawn, and new ₹500 and ₹2,000 notes with redesigned features were introduced.
- In 2023, the RBI announced the withdrawal of ₹2,000 notes from circulation.
- Subsequently, the ₹500 note became the highest denomination legal tender.
- Currently, ₹10, ₹20, ₹50, ₹100, ₹200, and ₹500 notes are in circulation.
Advice on Avoiding Rumors
The government and PIB have urged citizens not to believe unverified information or videos circulating on social media. The government suggested:
- Verify any financial or monetary information with official sources such as the RBI, Ministry of Finance, or PIB Fact Check.
- Do not share unverified content spreading rumors.
