RBI Governor: Do not rush to banks, INR 2000 notes will continue to be legal tender

The RBI on Friday through a notification advised all banks to stop issuing INR 2000 denomination banknotes with immediate effect.

RBI Governor Shaktikanta Das said that the INR 2,000 currency notes continue to be legal tender, while adding the notes were introduced primarily to replenish the currency that was withdrawn, following the 2016 demonetization.

Das said on Monday most of the withdrawn INR 2,000 rupee notes are expected to be returned by the deadline of September 30. Speaking to reporters for the first time since the surprise decision to withdraw the highest denomination currency note was announced, the RBI Governor said the decision was part of the bank’s ‘currency management.’

While the withdrawn 2,000 rupee notes can either be deposited in bank accounts or exchange for other currency, banks have been advised to make necessary arrangements for exchange, he said.

‘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 said, the RBI was sensitive to difficulties faced by people and would come out with regulations if need be, adding that shops will not have the right to refuse the notes.

The impact of the withdrawal on the economy will be ‘very very marginal,’ he said, adding that the INR 200 denomination makes up just 10.8 per cent of the total currency in circulation.

Furnishing PAN for deposits of INR 50,000 or more in bank accounts will continue to be required fort the withdrawn 2000 rupee notes, as liquidity in the system is being monitored on a daily basis.