- By Priyanka Payal
- Tue, 23 May 2023 01:54 PM (IST)
- Source:JND
Starting today (May 23) people can exchange or deposit Rs 2,000 notes in their nearest bank branch. On May 19, the Reserve Bank of India (RBI) announced its decision to withdraw the Rs 2,000 denomination bank notes from circulation. The central bank has given consumers and businesses a four-month deadline to exchange or deposit the existing Rs 2,000 denomination bank notes which continue to be legal tender. As soon as the RBI made this announcement old memories of 2016 demonetisation revived in the memories of the public and people were in a panic mode.
As per the RBI instructions, at one time, an individual can exchange up to Rs. 20,000 of Rs. 2,000 banknotes.
It is expected that the decision to withdraw Rs. 2000 notes will bolster system liquidity and bring under control short-term money market rates which have climbed recently.
Earlier, the central bank noted that the Rs 2,000 banknotes had reached the end of their estimated life span. The total value of these banknotes in circulation declined from Rs 6.73 lakh crore at its peak of March 31, 2018, to Rs 3.62 lakh crore, constituting as low as 10.8% of notes on March 31, 2023. This means that these notes constitute only around a tenth of the total currency in circulation.
However, there is a vast difference between what happened in 2016 and the current situation because in 2016 almost 86% of India’s currency was invalidated overnight. The central bank has appealed to the public to not rush to banks to exchange the Rs 2,000 notes as the public has time until September 30 to exchange and/or deposit the Rs 2,000 notes.
Not only this following this announcement memes started flooding social media platforms and various reports surfaced wherein people rushed to jewellery shops to buy gold in exchange for these notes.
Impact of Rs. 2000 Note withdrawal on banks?
The liquidity boost will reduce some pressure on Indian banks to raise deposit rates to meet growing credit demand. Indian lenders have been reporting double-digit credit growth in recent months as companies accelerated activity to meet rising domestic demand and the hike in benchmark rates by 250 basis points (bps) since May last year to tackle untamed inflation.
Though the central bank has done everything to ensure that minimum inconvenience is faced by the public and people do not go into panic mode. However, there are certain areas which still need more clarity and understanding. The most common questions with which most citizens are stuck include - Do you need to pay any additional fee to exchange your Rs 2,000 note, what is the limit on deposit of Rs. 2000 banknotes into a bank account? How many Rs. 2000 banknotes can be exchanged at one time? How do deposit or exchange Rs 2,000 notes? Can customers deposit Rs. 2000 notes at any bank branch, Can you exchange Rs 2,000 notes exceeding Rs 20,000 at one time?, and What are the consequences if someone fails to deposit or exchange Rs 2,000 notes by September 30?
In this article, we have brought you a list of FAQs which will answer most of these questions.
FAQs:
Do you need to pay any additional money for the exchange facility?
The answer is No as the exchange facility will be provided free of cost.
What amount of Rs. 2000 banknotes can be exchanged at one time?
Members of the public can exchange Rs. 2000 banknotes upto to a limit of Rs. 20,000 at one time.
How do you deposit or exchange Rs 2,000 notes?
The RBI said that people can approach any bank branch to deposit and/or exchange Rs 2,000 notes. The central bank added that the facility for depositing into accounts and exchanging Rs 2,000 notes will be available at all banks till September 30, 2023.
Steps to exchange 2000 notes:
l Visit any bank branch that is near your home.
l Once you reach the bank, go to the 2000 rupee note exchange counter.
l After this, you have to ask the bank employee to change your 2000 rupee note. After this, the concerned bank employee will exchange your 2000 notes.
Can an individual deposit Rs. 2000 notes at any bank branch?
The answer is Yes. An individual can visit any nearest bank branch in the country to exchange Rs 2,000 banknotes up to a limit of Rs 20,000 at one time.
What if someone wants to exchange Rs 2,000 notes exceeding the Rs 20,000 limit?
Though in normal circumstances customers do not need to fill out forms or submit ID proof to exchange Rs 2,000 notes up to Rs 20,000 at one time.
However, if an individual wants to deposit Rs 2,000 notes worth more than Rs 20,000, they may be asked to fill out a form or a requisition slip.
What are the consequences if someone fails to deposit or exchange Rs 2,000 notes by September 30?
The RBI has clarified that there are several Indians who live abroad or have gone for long vacations or work. He clarified that there is no reason to panic as the deadline is till September 30.
Even if someone fails to deposit or exchange Rs 2,000 notes within the stipulated deadline, the RBI said their grievances will be heard and necessary steps will be taken to help them. The RBI will see how much of these notes come back to banks, and then decide on a possible extension of the September 30 deadline.
Is there a complaint mechanism if a bank denies to exchange or accept deposit of Rs 2,000 notes?
If any bank branch denies to exchange or accept deposits of Rs 2,000 notes, customers can file a complaint with the concerned bank.
According to RBI if the bank does not respond within 30 days after the complaint or if the complainant is unsatisfied with the resolution, an individual can file another complaint under the Reserve Bank – Integrated Ombudsman Scheme (RB-IOS), 2021 at the Complaint Management System portal of the RBI.
Meanwhile, on Tuesday, Public sector banks including State Bank of India (SBI) and Punjab National Bank (PNB) and HDFC Bank, issued clarifications regarding the Rs 2,000 exchange rules to make the exchange process smoother.
PNB clarified that there is no need for an Aadhaar Card or official verified documents (OVD) required for the exchange of the currency. Besides, the lender also said that customers do not need to fill out any form for the same.
