Highlights:
- Banks across India have started accepting Rs 2,000 notes for exchange, and individuals can exchange up to ten notes at once.
- Even though there is no limit on deposits, for deposits of more than 50000, KYC guidelines must be followed.
- The withdrawal of Rs 2,000 notes is part of the RBI’s Clean Note Policy, which aims to provide high-quality currency with enhanced security features.
Today, the 23rd of May 2023, marks the beginning of the exchange process for Rs 2,000 notes in India. While there were speculations about demonetising the Rs 2,000 note, the Reserve Bank of India (RBI) has clarified that it is only withdrawing the currency from circulation, not rendering it invalid. Banks have been given four days to prepare for the exchange. The Rs 2,000 notes were first introduced in 2016 following the demonetisation of old Rs 500 and Rs 1,000 notes. The RBI’s decision has prompted individuals holding Rs 2,000 notes to seek note exchange services at their respective banks.
Here are some important points to help you understand the withdrawal process:
- Avoid rushing to the banks and panicking. Though the RBI has set a deadline of September 30 for people to get their notes exchanged in a tranche of 10 notes, the central bank also said that the 2,000 rupee note would remain legal tender even after that date. It can still be used for commercial purposes. RBI Governor Shaktikanta Das said, “It will continue as legal tender. We will wait how many notes are coming. I cannot give a speculative answer about what will happen post-September 30,”.
- There is no limit on depositing Rs 2,000 notes. While only ten notes can be exchanged at once, there are no restrictions on depositing the notes. However, large deposit transactions will require adherence to know-your-customer (KYC) guidelines.
- Deposits below Rs 50,000 do not require any additional documentation. “We have not come out with an additional procedure. You must be aware that there’s an income tax rule if you deposit cash above Rs 50,000, then you have to produce your PAN. So existing rules will apply,” said Das.
- No requisition slip is needed for transactions involving up to ten currency notes. The State Bank of India has confirmed that the public can exchange Rs 2,000 notes up to a limit of Rs 20,000 without obtaining a requisition slip.
- Measures have been taken to facilitate the exchange process. The RBI has advised banks to provide shelters for individuals exchanging or depositing notes to protect them from sunlight. Additionally, drinking water should be made available to people in queues. Banks have been instructed to make note exchange facilities easily accessible over the counter.
- RBI Governor Shaktikanta Das said that the withdrawal of Rs 2,000 notes from circulation is expected to have a minimal impact on the economy, as these notes constitute only 10.8% of the total currency in circulation. It is anticipated that most of the Rs 2,000 notes will be returned to the banking system by September 30.
- Adequate quantities of notes of different denominations are available with banks. The RBI assures that there is more than enough stock of printed notes, both with the RBI and the currency chests operated by banks. There is no need to worry about shortages.
- Special considerations may be made for individuals residing abroad. The RBI recognises the potential difficulties faced by people on extended foreign visits or those living abroad on work visas. Special exemptions may be granted after September 30 to those with legitimate reasons for not exchanging their currency notes.
- The printing of Rs 2,000 notes ceased in April 2019, and the RBI has not printed any Rs 2,000 denomination currency notes after April 2019.
- The withdrawal of Rs 2,000 notes is part of the RBI’s Clean Note Policy, aimed at providing the public with high-quality currency notes and coins with enhanced security features.
Read | 12 Tips On How To Improve Your CIBIL Score
