For the first time since the Union government announced about the withdrawal of Rs 2,000 notes, Governor of Reserve Bank of India (RBI), Shaktikanta Das has divulged what's behind the surprise announcement in the midst of a sharp criticism from the opposition parties and economists. The withdrawal announcement of the highest denomination in India has been spelled as another round of demonetisation, which was first played out by the Modi administration in 2016 during which it revoked the legal tenders of Rs 500 and Rs 1000 notes.
While the 2016 demonetisation was carried out with the mission of eradicating the black money, it was eventually failed and has become one of the biggest blunders to the Indian economy. Now, as Rs 2,000 notes are being withdrawn, the government has advised the people to deposit and exchange Rs 2,000 notes in the nearby banks before September 30, 2023.
On May 19, the RBI said that it will withdraw all the Rs 2,000 banknotes as a part of its clean note policy, though it will continue to be a legal tender. Shocked to hear the announcement, thousands of people rushed to nearby banks to surrender the notes and to exchange them with other denominations. As the trend of thronging banks across the country to change the note has been rampant, RBI Governor Shaktikanta Das has opened up for the first time, urging the people not to rush to the banks.
While speaking to the reporters on Monday - May 22, Das said that most of the Rs 2,000 note will be back to the banks by September 30, 2023, and he also urged the people not to rush to the banks to deposit or exchange the notes. By citing that there is enough time to exchange the notes, Das instructed the commercial centres and shops should accept these notes from the customers.
He further said, "From time to time, RBI withdraws notes of a particular series and issues fresh notes. We are withdrawing the Rs 2000 notes from circulation but they continue as legal tender." He also instructed the banks to not issue soiled or torn notes to customers and has also asked the banks to make necessary arrangements like installing shades from Sun and water facilities at banks for customers.
On responding to a question why the Rs 2,000 banknotes were withdrawn, Das said that the notes have completed their life cycle. He said that the Rs 2,000 notes were primarily issued to replenish the currency after the 2016 demonetisation when Rs 500 and Rs 1000 notes were withdrawn as legal tenders. By citing that the Rs 2,000 notes were printed four to five years back, he stated that the printing of these notes has been stopped and that there are enough notes of other denominations at present.
He said, "That purpose has been fulfilled. Today there are enough notes in circulation, of other denominations. Even the circulation of Rs 2000 notes as we have explained has come down from its peak of 6 lakh 73,000 crores to about 3 lakh 62,000 crores." Das has also asserted that Rs 500 bank note will be printed based on the need.