http://www.newindpress.com/NewsItems.asp?I...rnataka&Topic=0

Requires signup/login. Is it posted elsewhere?

Huh, sorry. It wasn't earlier.

What I remember was that the 1 and 2 rupees notes aren't really circulated much longer because shops refuse to accept them. Hence such notes are only accepted in banks and once they get in there, they will not be released into the public.