The banks in India have witnessed a sharp pace in collecting ₹2,000 notes. According to a report and RBI, around 50% of ₹2,000 currency notes have been deposited or exchanged so far. Notably, there were 1.81 billion pieces of ₹2,000 banknotes were in circulation as of 31 March, comprising 1.3% of total circulation in volume terms. And, the total value of ₹2,000 notes in the system is ₹3.62 lakh crore.
“Around ₹1.8 lakh crore worth ₹2,000 notes back to banking system:” says RBI Governor.
On May 19, the RBI announced the withdrawal of ₹2,000 currency notes from circulation and said existing notes in circulation can either be deposited in bank accounts or exchanged by September 30. The banknotes in ₹2,000 denomination will continue to be a legal tender, the RBI said in a statement.
In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, the RBI has said the exchange of ₹2,000 bank notes for currencies of other denominations can be made up to a limit of ₹20,000 at a time at any bank starting May 23.
The RBI introduced ₹2,000 banknotes in November 2016 under Section 24(1) of the RBI Act, 1934 — which allows the central bank to issue notes of any denomination not exceeding ₹10,000 in order to meet the currency requirement of the economy.
The RBI has decided to roll back ₹2,000 currency notes as part of the “currency management system”. The central bank of India stopped printing ₹2,000 notes in 2018-19.
Roughly 89% of 2,000 notes were issued before March 2017, and are at the end of their estimated life span of four to five years, RBI said, pointing out that ₹2,000 are not commonly used for transactions.
The RBI has already stated that citizens don’t need to pay any fee to avail of the exchange facility. The RBI has instructed the banks to make arrangements to reduce inconvenience for senior citizens and persons with disabilities who wish to exchange or deposit ₹2,000 banknotes.
The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) in its second bi-monthly monetary policy meeting of FY24 decided to leave the repo rate unchanged at 6.5%. The focus remains on the withdrawal of accommodation. The RBI also retained the FY24 GDP growth forecast at 6.5% while expecting FY24 CPI inflation to be at 5.1%.
