RBI expects most Rs 2,000 notes to be returned by September 30, says Shaktikanta Das
The objective of introducing the Rs 2,000 note was to replenish the money that had gone out of system due to demonetisation, the central bank governor said.
Reserve Bank of India Governor Shaktikanta Das on Monday said he expects most of the withdrawn Rs 2,000 notes to be returned by the deadline of September 30, PTI reported. He reiterated that the notes will continue to be legal tender and are only being taken out of circulation.
On Friday, the central bank had announced the withdrawal of Rs 2,000 notes from circulation, saying that evidence showed the denomination was not being commonly used for transactions. Even as the notes continue to be legal tender, people have been asked to exchange them from banks or deposit them in their accounts by September 30.
Speaking to reporters on Monday, Das expressed confidence that withdrawing the notes will have “very very marginal” impact on the economy as they made up for only 10.8% of the total currency in circulation.
The central bank chief added that the Rs 2,000 notes had been introduced with the primary objective of replenishing the amount of money that had gone out of the economy due to demonetisation of the Rs 500 and Rs 1,000 notes in 2016.
The Rs 2,000 notes were issued after the November 2016 decision of demonetisation when Rs 500 and Rs 1,000 denominations were abruptly withdrawn in what the government claimed was a move to fight corruption. Experts believe that the decision was destructive for the economy as well as large sections of the population, some of which are still reeling from its effects.
In 2019, the central bank had reduced the printing of Rs 2,000 notes to a minimum.
On Sunday, the State Bank of India said that Rs 2,000 notes up to a total value of Rs 20,000 can be deposited or exchanged at a time without any identity proof or requisition slip.