The Reserve Bank of India has extended the deadline to withdraw Rs 2,000 bank notes from the system by another week, until October 7. Since the announcement of the withdrawal on May 19, Rs 3.42 lakh crore of such notes have been returned or exchanged by the public, accounting for 96% of the notes in circulation. Only Rs 14,000 crore of Rs 2,000 notes remain in circulation.
The deadline to deposit or exchange Rs 2,000 notes was initially set for September 30, 2023. However, the central bank has decided to extend the deadline until October 7. The withdrawal of Rs 2,000 notes is not similar to the demonetization carried out in 2016 when Rs 500 and Rs 1,000 notes were made invalid overnight.
The higher denomination notes were introduced in May 2023 to expedite the remonetization of the economy. However, concerns were raised about the quality of the notes in circulation as printing had stopped in FY19.
The withdrawal of Rs 2,000 notes had unintended consequences, such as helping banks report higher deposit growth. The RBI has stated that the notes will continue to be legal tender even after October 7, but it urges the public to deposit or exchange them without delay.
From October 8 onwards, deposit and exchange facilities at bank branches will be stopped. People will have to exchange their Rs 2,000 notes at one of the 19 RBI offices. There is a cap of Rs 20,000 per transaction for exchanging the notes, but there are no restrictions for tendering them at RBI offices for crediting into bank accounts.
People can also send Rs 2,000 notes through India Post to any of the 19 RBI Issue Offices for credit to their bank accounts. However, this transaction is subject to government regulations and document submission.
Courts, law enforcement agencies, government departments, and other public authorities involved in investigations or enforcement can deposit or exchange Rs 2,000 notes at any RBI office without any limit. The facility to deposit or exchange the notes at RBI offices will continue until further notice.
