RBI extends deadline to exchange, deposit Rs 2,000 notes till Oct 7

Mumbai: The Reserve Bank on Saturday extended the special drive to withdraw Rs 2,000 bank notes from the system by another week, till October 7.

The public has returned Rs 3.42 lakh crore of the Rs 2,000 notes since May 19, the RBI said in a statement posted on the last day of the drive to withdraw the notes.

These notes were either deposited or exchanged at bank branches till September 29, and represent 96 per cent of the outstanding currency in circulation as on May 19 this year, the Reserve Bank of India (RBI) said.

The Rs 2,000 notes shall continue to be legal tender even after October 7, but can be exchanged only at RBI offices, the central bank said, adding that they cannot be deposited or exchanged at bank branches.

According to Reserve Bank of India (RBI) Governor Shaktikanta Das earlier statement, the decision was part of currency management. Rs 2,000 currency notes continue to be legal tender.

The impact of the withdrawal on the economy will be "very very marginal", he said, adding Rs 2,000 currency notes made up for just 10.8 per cent of the total currency in circulation.

Rs 2,000 rupee notes were introduced primarily to replenish the currency that was withdrawn following 2016 demonetisation. Withdrawn 2,000 rupee notes can either be deposited in bank accounts or exchange for other currency.

The Indian government and the RBI removed Rs. 2,000 notes from circulation in favour of lesser denominations that are now in use.

The RBI ceased producing banknotes of the Rs. 2,000 denomination under the pretext that these notes are being used for hoarding and tax evasion, and no new notes of this denomination were created from the 2019–20 fiscal year.

The Central bank stated in its statement that “the goal of launching Rs. 2,000 banknotes was realised after banknotes in other denominations became sufficiently accessible. So, in 2018–19, the production of Rs. 2,000 banknotes were suspended.”