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What bankers should know about circulation, deposit, and exchange of ₹2000 notes
In a statement, the RBI said it has asked banks to stop issuing ₹2,000 notes with immediate effect.
The Reserve Bank of India (RBI) Governor Shaktikanta Das on Monday said that people should not rush to the banks to exchange ₹2,000 currency notes as the deadline of the same four months away.
The central bank on Friday had earlier issued comprehensive guidelines to all banks regarding the withdrawal of ₹2000 denomination banknotes from circulation. The guidelines outline the plan of action that banks should follow and provide clarity on the continued legal tender status of these banknotes.
The ₹2000 banknotes were introduced in November 2016 to meet the immediate currency requirement of the economy after the withdrawal of ₹500 and ₹1000 banknotes. However, with the objective of their introduction fulfilled and the availability of other denominations in sufficient quantities, the printing of ₹2000 banknotes ceased in 2018-19. Furthermore, most of the ₹2000 denomination notes issued before March 2017 have reached the end of their estimated lifespan and are no longer commonly used for transactions, according to RBI.
Also Read | What will happen to ₹2000 notes after September 30?
In line with the central bank's "Clean Note Policy," it has been decided to withdraw the ₹2000 banknotes from circulation while maintaining their legal tender status. The RBI has outlined a plan of action for banks to ensure a smooth transition:
Handling of existing stock and receipts:
- Banks must discontinue the issuance of ₹2000 banknotes immediately.
- ATMs and Cash Recyclers should be reconfigured accordingly.
- Banks holding Currency Chests (CCs) must not allow withdrawals of ₹2000 banknotes from CCs. All balances held in CCs should be classified as unfit and prepared for dispatch to the respective RBI offices.
- All ₹2000 banknotes received by the banks should be sorted through Note Sorting Machines (NSMs) for accuracy and genuineness. They should then be deposited in the currency chests under the Linkage Scheme or made ready for dispatch to the nearest Issue Office of RBI.
Facility for Deposit and Exchange:
- The facility for deposit and/or exchange of ₹2000 banknotes will be available to the public until September 30, 2023.
- Deposits into bank accounts can be made without restrictions, subject to compliance with Know Your Customer (KYC) norms and other statutory requirements.
- Banks must comply with Cash Transaction Reporting (CTR) and Suspicious Transaction Reporting (STR) requirements, where applicable.
- Exchange of ₹2000 banknotes can be done through all bank branches, with a limit of ₹20,000 at a time to minimize inconvenience.
- Business Correspondents (BCs) may also exchange ₹2000 banknotes up to a limit of ₹4000 per day for account holders. Banks may enhance the cash holding limits of BCs at their discretion.
- Banks are requested to make special arrangements to reduce inconvenience for senior citizens, persons with disabilities, and women seeking to exchange/deposit ₹2000 banknotes.
- Mobile vans may be considered for providing deposit/exchange facilities in remote or unbanked areas.
Replenishment of Stock of Other Denominations for Exchange:
- Branches and CCs should estimate their cash requirements and obtain banknotes of other denominations from linked or nearby currency chests or the RBI well in advance.
- CC holding branches should support linked or non-linked branches in accepting ₹2000 banknotes and distributing banknotes of other denominations. In case of difficulties in obtaining cash, banks may contact the concerned Issue Office of RBI.
Dissemination of Information:
- The ₹2000 banknotes will continue to be legal tender.
- A document containing Frequently Asked Questions (FAQs) has been prepared and should be provided to staff manning the exchange counters and displayed in banking halls, ATM kiosks, etc.
- A separate press release informing the public about the exercise and soliciting their cooperation will be issued. Banks are requested to display a copy of the press release in banking halls, ATM kiosks, etc.
