Most of Rs 2000 note to come back by Sept-end: RBI Governor

The Reserve Bank of India (RBI) on Friday announced the withdrawal of Rs 2000 banknotes from circulation
Last Updated 22 May 2023, 16:54 IST

Amid growing political heat over the impact of Rs 2000 note ban on curbing black money, RBI Governor Shaktikanta Das on Monday said majority of the high denomination banknotes are expected to come back in the system by September 30.

“We expect most of the notes to come back. That is our expectation at this stage,” RBI Governor told reporters adding the withdrawal of Rs 2000 notes from circulation is a part of the central bank’s “currency management system.”

The Reserve Bank of India (RBI) on Friday announced the withdrawal of Rs 2000 banknotes from circulation. The central bank has advised people to either deposit the notes in their bank accounts or get it exchanged with other denomination notes by September 30.

The move has been hailed by some BJP leaders as an attempt to unearth black money. “This is the second surgical strike on black money,” senior BJP leader and Bihar’s former deputy chief minister Sushil Kumar Modi said.

Criticising the move, former union finance minister P Chidambaram said, “The Rs 2,000 note only helped keepers of black money to hoard their money with ease. The keepers of Rs 2000 notes are being welcomed on a red carpet to exchange their notes!”

However, the RBI Governor emphasised that the withdrawal of Rs 2000 notes from circulation is just a part of the central bank’s clean note policy.

"My advice is to please see it as a part of the currency management operations of the Reserve Bank. That is the primary purpose,” he said.

The RBI’s move is also not seen as an attempt to curb the circulation of fake currency. Key reasons cited for 2016 demonetisation of hitherto 500 and 1000 rupees notes were curbing black money and fake currencies. Other objectives cited by the government were curbing terror financing and promoting digital payments.

However, Das categorically denied circulation of fake or counterfeit Rs 2000 denomination notes. “The security features of the new Mahatma Gandhi series notes have not been breached,” he said.

The RBI Governor refused to clarify whether Rs 2000 notes would remain a legal tender after September 30 or not. “I can’t make a speculative answer about what will happen after 30th September," he said.

Das admitted that there has been reluctance in accepting Rs 2000 notes for quite some time. “This reluctance has been there for some time. It may have increased now. But we have clearly said in our notification that the note will continue as legal tender.”

When asked if the RBI will monitor accounts which see a large amount of Rs 2000 note deposits, Das said, “The RBI does not scrutinise anything. Other agencies (like the income tax department) will follow their normal procedure. What they do is up to them."

(Published 22 May 2023, 16:45 IST)

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