Shaktikanta Das, the Governor of the Reserve Bank of India (RBI), stated that the RBI anticipates receiving the majority of ₹2,000 notes by September 30. He provided this clarification while addressing several queries that arose following the RBI’s unexpected decision last week.
What Happened? During his first interaction with the media since the unforeseen decision to withdraw the highest denomination currency note, Governor Das reassured the public that the ₹2,000 notes continue to serve as legal tender. He stated that the ongoing removal process is part of standard currency management.
Despite the financial market crises caused by the Ukraine war and Western bank failures, Das affirmed the strength and stability of the Indian currency management system. He minimized the impact of the withdrawal on the Indian economy, stating it would be ‘very very marginal’ since ₹2,000 currency notes only comprise 10.8% of the total circulating currency.
The introduction of the ₹2,000 rupee notes was primarily to replace currency following the 2016 demonetization, Das clarified. With the notes’ withdrawal, people can either deposit them in bank accounts or exchange them for other currencies, and banks are instructed to facilitate these transactions.
Das expects most of the ₹2,000 banknotes to return to the exchequer by the end of September, reassuring that there are more than enough printed notes readily available, not just with the RBI, but also in bank-operated currency chests. He emphasized that there’s no need for concern about currency stock.
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The RBI, Das mentioned, is cognizant of the difficulties people may face and will enact regulations if necessary. Lastly, he noted that the existing income tax rule requiring PAN for deposits of ₹50,000 or more will apply to deposits of withdrawn ₹2,000 notes, with system liquidity monitored daily.
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