Most of the withdrawn ₹2,000 currency notes expected to return by Sep 30: RBI governor

Most of the ₹2,000 rupee notes in circulation are expected to be returned by the deadline of September 30, said the Reserve Bank of India (RBI) governor Shaktikanta Das on Monday (May 22).

Speaking to reporters for the first time since the surprise decision to withdraw the highest denomination currency note was announced, Das said the decision was part of currency management. ₹2,000 currency notes continue to be legal tender, Das added.

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

The impact of the withdrawal on the economy will be “very very marginal”, Das said, adding ₹2,000 currency notes made up for just 10.8 per cent of the total currency in circulation. Further, the RBI governor said the ₹2,000 rupee notes were introduced primarily to replenish the currency that was withdrawn following 2016 demonetisation, he said.

Also read: No form, identity proof needed to exchange ₹2,000 notes up to limit of ₹20K: SBI

While the withdrawn ₹2,000 rupee notes can either be deposited in bank accounts or exchange for other currency, banks have been advised to make necessary arrangements for exchange, he said.

“We expect most of the ₹2,000 bank notes to come back to the exchequer by September 30,” he said. “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 for worry. We have sufficient stocks, no need to worry.”

RBI, he said, was sensitive to difficulties faced by people and would come out with regulations if need be.

Also read: RBI to withdraw ₹2,000 currency notes from circulation

Existing income tax requirement of furnishing PAN for deposits of ₹50,000 or more in bank accounts will continue to apply for deposits of the withdrawn ₹2000 rupee notes, he said.

Das said liquidity in the system is being monitored on a daily basis.