No need to rush to exchange Rs 2,000 notes, Sept 30 deadline to ensure exercise is taken seriously: RBI Guv

RBI Governor Shaktikanta Das on Monday said there is no need to rush to the banks to exchange Rs 2,000 as the deadline of September 30 is to ensure that the exercise is taken seriously. He added that the decision to withdraw Rs 2,000 from circulation is part of the currency management operations of the Reserve Bank and is in tune with the clean note policy.

"2,000 notes were primarily introduced to quickly replenish earlier Rs 500 and Rs 1,000 notes. They have been withdrawn from circulation, but it is still legal tender," Das said while addressing reporters for the first time since the surprise decision to withdraw the highest denomination currency note was announced.

For the exchange of notes, Das said that the same procedure will be followed as banks do for deposits. He added that most banks have already modified their ATMs and typically Rs 2,000 notes are not available.

"Indian currency management system is very robust, the exchange rate has remained stable despite the crisis in financial markets due to war in Ukraine and failure of certain banks in the West," he said.

On the impact of the withdrawal on the economy, he said that it would be "very very marginal", adding Rs 2,000 currency notes made up for just 10.8 percent of the total currency in circulation.

"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. There is no reason to worry. RBI is sensitive to difficulties faced by people and would come out with regulations if need be," Das said.

RBI on Friday in a surprise move announced the withdrawal of Rs 2,000 currency notes from circulation but gave the public time till September 30 to either deposit such notes in accounts or exchange them at banks. Unlike the November 2016 shock of demonetisation, when old Rs 500 and Rs 1,000 notes were invalidated overnight, the Rs 2,000 notes will continue to be legal tender.

In a communication to the chief general manager of all its local head offices, the State Bank of India (SBI) informed that the facility of exchange of Rs 2,000 notes by the public up to a limit of Rs 20,000 at a time will be allowed without obtaining any requisition slip.

With regard to the deposit of such notes in your own account, RBI has not specified any limit but it will be subject to compliance with extant Know Your Customer (KYC) norms and other applicable statutory requirements.

"Further, no identity proof is required to be submitted by the tenderer at the time of exchange," the communication dated May 20 said.