RBI announces withdrawal of Rs 2,000 notes from circulation
Currency can be exchanged till Sept 30, 2023
Source: Nirendra Dev *

New Delhi, May 19 2023: To many it came as a shock, for most common people it did not matter much as the circulation of Rs 2000 notes had declined substantially.

The Reserve Bank of India (RBI) on Friday announced withdrawal of Rs 2,000 currency notes that were introduced in 2016 after the demonetisation policy from circulation.

However, the central bank gave public time till September 30, 2023 to either deposit such notes in accounts or exchange them at banks.

Unlike the November 2016 shock demonetisation when old Rs 500 and Rs 1,000 notes were banned outright overnight, the Rs 2,000 notes will continue to be a legal tender till September 30 .

Former Finance Minister and Congress leader P Chidambaram says the demontisation or note ban issue has come full circle.

He described today's decision on Rs 2000 notes as --- "as expected" .

RBI expects that 4 month time is enough for people to exchange notes with the banks.

Most of the Rs 2000 notes that are in circulation will return to banks within the given time frame of 30th September.

"This is a routine exercise of the RBI and people need not panic," sources said.

From the opposition camp, Delhi Chief Minister Arvind Kejriwal went 'personal' against Prime Minister Narendra Modi and said, "ek anpad pradhan mantri ko koi bhi kuchh bol sakta hae (Any one finds its easy to mislead an uneducated Prime Minister)".

He said that this is the reason why he says that the PM should be educated.

The fact of the matter is different and many like 'educated' intellectuals and leaders like Kejriwal may not bother much.

The central bank (RBI) has noted lately that the Rs 2000 denomination note is no longer commonly used for transactions, as its circulation has come down from Rs 26.73 lakh crore in March 2018 to a modest Rs 3.62 lakh crore in March 2023 .

On 19 May, the Reserve Bank of India announced that it is withdrawing the circulation of Rs 2000 currency notes.

RBI informed that it had stopped printing the high value notes in 2018-19, most of the notes have reached their end of life.

In fact, the official explanation is the notes are being withdrawn in pursuance of the "Clean Note Policy" .

The RBI has said that people can exchange the Rs 2000 notes they may be having at banks from 23 May to 30 September.

Only Rs 20,000 can be exchanged at a time, which means taking notes in other denominations by depositing Rs 2000 notes.

There may be no limit on depositing the Rs 2000 notes in bank accounts.

In 2018, Rs 2000 notes formed 38 percent of the total cash chest and in 2023, it is only 10.8 percent.

It is evident that the notes were taken out of circulation in a gradual manner and therefore, the current move was in play for a long time.

The moot point is the idea was to minimise the trouble caused to the common public.

In 2020 itself, reports started to appear in the media about the disappearing Rs 2000 notes and ATMs were mostly dispensing only Rs 500 notes.

One politician in the opposition camp summed up the spirit of the common man on the issue saying, "No problem I don't have much of that denomination ..

maybe not even a single note...

so no issue" .

P Chidambaram tweeted to say, "As expected, the government/RBI have withdrawn the Rs 2000 note and given time until September 30 to exchange the notes.

The Rs 2000 note is hardly a popular medium of exchange.

We said this in November 2016 and we have been proved correct.

The Rs 2000 note was a band-aid to cover up the foolish decision of demonetising Rs 500 and Rs 1000 notes which were popular and widely exchanged currencies I shall not be surprised if the government/RBI re-introduced the Rs 1000 note as well.

Demonetisation has come full circle!" .

* The sender of this news can be contacted at nirendev1(AT)gmail(DOT)com .

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