Reserve Bank of India (RBI) Governor Shaktikanta Das reiterated on Monday that Rs 2,000 notes will continue to be recognized as legal tender, following the central bank’s announcement of their withdrawal from circulation.
Das also urged the public not to rush to banks, stating that he does not anticipate a surge in branches. The Governor explained that the issuance of Rs 2,000 notes was primarily aimed at replenishing the money supply that was reduced during the demonetization of Rs 500 and Rs 1,000 notes.
During a media interaction, Shaktikanta Das highlighted that the higher denomination notes were printed within a short period to increase liquidity in the economy. He further mentioned that the circulation of Rs 2,000 notes had fallen below 50% since their introduction.
Regarding the September 30 deadline for exchanging the notes, the governor clarified that it was set to ensure the matter is taken seriously. However, the RBI will reevaluate the deadline based on the prevailing circumstances.
While the RBI withdrew the Rs 2,000 denomination banknotes from circulation on Friday, they will retain their status as legal tender. Banks have been advised to discontinue issuing Rs 2,000 notes with immediate effect.
In the meantime, the RBI stated that individuals can continue to deposit Rs 2,000 banknotes into their accounts or exchange them for other denominations at any bank branch until September 30, 2023.
The introduction of the Rs 2,000 denomination banknote in November 2016 was primarily aimed at fulfilling the currency requirement of the economy promptly following the withdrawal of the legal tender status of all Rs 500 and Rs 1,000 notes in circulation at that time.
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