Your Top 6 Questions On Withdrawal Of Rs 2,000 Notes Answered

In a significant move, the Reserve Bank of India (RBI) last week announced that it has decided to withdraw Rs 2,000 notes from circulation. The central bank has given the public time till September 30 to deposit or exchange these notes from banks.

It has, however, clarified that the high-value notes will continue to be legal tender even after the deadline.

The central bank’s move has left people with many questions. To allay their concerns, RBI Governor Shaktikanta Das today spoke to media persons. Mr. Das assured citizens that there is no reason to worry and that they need not rush to the banks.

Here are the 6 top questions over the withdrawal of these notes and their answers.

Question 1. Will Rs 2,000 notes be valid after September 30th?

Yes. The Rs 2,000 banknote will continue to be legal tender status and people can continue to use them. Stressing this point, the RBI governor said, ”There is no need to worry as notes will continue as legal tender. We expect most of the Rs 2,000 banknotes to come back to the exchequer by September 30. We have more than adequate quantities of printed notes already available in the system, not just with RBI but with currency chests operated by banks. We have sufficient stocks, no need to worry.”

He added that non-resident Indians (NRIs), including H-1B visa holders, won’t face any issues either.

Question 2. Are the banks prepared?

Assuring citizens, Mr. Das said banks have been advised to make necessary arrangements to carry out the process. He urged customers to not rush to banks as they have four months to exchange their Rs 2,000 notes or transfer the amount to their bank account.

Question 3. Why the September 30 deadline?

Mr. Das said the deadline was announced so that people take the process seriously.

”…Time is given up to September 30 so that it is taken seriously. Otherwise, if you leave it open-ended, it becomes a kind of an endless process,” the RBI governor said.

Question 4. Why is the RBI withdrawing Rs 2000 notes?

The RBI has said the move is part of its clean note policy–where notes of a particular series are withdrawn and fresh ones are issued from time to time–and should be seen as the currency management operation of the central bank.

”We have clearly explained in our press note that the Rs 2,000 notes were primarily issued for the purpose of quickly replenishing the value of money which was being taken out from the system when the legal tender status of then-prevailing Rs 1000 and Rs 500 notes was withdrawn. That purpose has been fulfilled, today there are enough notes in circulation, of other denominations,” Mr Das explained.

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

Question 5. Will bank deposits be monitored?

The RBI governor assured that the central bank never scrutinises bank deposits of citizens, as it’s the job of the Income tax department.

Question 6. Are Rs 1,000 notes coming back?

There is no plan to reintroduce Rs 1,000 banknotes to ease the impact following the withdrawal of Rs 2,000 notes, the RBI governor noted, while calling the possibility ”speculative.”