According to Reserve Bank Governor Shaktikanta Das, over two-thirds of the Rs 2,000 currency notes were returned to the system within a month of the recall order. The Reserve Bank ordered the recall of Rs 2,000 banknotes worth approximately Rs 3.62 lakh crore on May 19 in an unexpected move that was part of the clean note policy.
On June 8, during the second financial arrangement audit of the monetary, Das revealed that around Rs 1.8 lakh crore worth of the Rs 2,000 notes in circulation had been returned, and the remaining balance was exchanged for deposits totaling 8 lakh crore.
“More than two-thirds or Rs 2.41 lakh crore worth of the Rs 3.62 lakh crore (as of March 31, 2023) of the now-recalled 2000 banknotes have come back to the system as of mid-last week,” Governor Das told PTI Bhasha in an interview at the RBI headquarters last week.
He explained that deposits account for as much as 85% of the total money that has returned to the system, while currency exchanges account for the remaining balance.
However, the national bank has set September 30, 2023, as the last day for trade/stores. Das said the cutoff time isn’t set in stone, and individuals need not rush to claim their money.
A recent analyst report claimed that the move would lead to higher consumer spending, ultimately helping prop up the economy and achieve growth beyond the projected 6.5 percent.
“I don’t see any negative impact of the note recall on the economy at all,” Das said.
The government and the central bank anticipate that the GDP will fall to 6.5 percent this fiscal year, with a first-quarter profit of 8.1 percent before tapering off in subsequent quarters.
The central bank stated that the existing 2,000-denomination banknotes would continue to be legal tender after issuing the recall order on May 19 and instructing banks to open special counters to collect the notes from the public on May 23.
After the September 30 deadline, Das said he wasn’t sure if he would ask the government to remove these notes from their status as legal tender.
Under Section 24(1) of the RBI Act of 1934, the 2000 banknotes were introduced in November 2016 within days of the demonetization on November 8, when the government revoked the legal tender status of all 500 and 1000 banknotes to quickly meet currency requirements.
The estimated lifespan of the 2,000 banknotes is four to five years, and approximately 89% of them were issued prior to March 2017.
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
