Rs 2000 note exchange begins today

Banks make adequate arrangements; no plan to reintroduce Rs 1,000 notes, says RBI governor. 

A 2000 rupee note is seen in this illustration photo June 1, 2017.

MUMBAI: A day before the Reserve Bank of India opens the window for exchange of Rs 2,000 denomination currency notes, RBI governor Shaktikanta Das on Monday dismissed rumours of a new Rs 1,000 currency note being in the works. “There’s no such proposal right now,” he told reporters here on Monday in his first media interaction after the decision to withdraw the highest denomination note from circulation last Friday.

As the window for customers to exchange Rs 2,000 notes in their possession will start on Tuesday, Das said there is no need to panic. Urging the public not to rush to banks, he said enough time has been given to exchange the notes. He reiterated the notes will remain legal tender (valid for transaction). 

The RBI governor’s comments came after reports said people and businesses have stopped accepting Rs 2,000 notes as a mode of payment.

“Let me clarify and re-emphasise that it is a part of the currency management operations of the Reserve Bank. For a long time, the Reserve Bank has been following a clean note policy,” he said, adding: “From time to time, RBI withdraws notes of a particular series and issues fresh notes. We are withdrawing the Rs 2,000 notes from circulation but they continue as legal tender.”

He expects most of the notes to be returned to the exchequer by the deadline of September 30 and no scarcity of other notes. “We have given a deadline so that the process will be taken seriously. We can’t leave it open-ended,” he said.

RBI has urged the public to exchange or deposit these notew 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 for worry. We have sufficient stocks, no need to worry,” Das clarified.

The impact of the withdrawal on the economy will be “very very marginal”, he said, adding Rs 2,000 currency notes made up for just 10.8% of the total currency in circulation. While the withdrawn Rs 2,000 rupee notes can either be deposited in bank accounts or exchanged for other denomination notes, banks have been advised to make necessary arrangements for exchange.