If a bank refuses to exchange or accept ₹2000 notes, what actions should customers take?

The highest denomination banknote ₹2000 of India is being scrapped and RBI has asked banks to stop issuing them immediately. On the other hand, customers are encouraged to either exchange their ₹2000 banknotes or deposit them. In its FAQs, RBI has also explained directions if a bank refuses to exchange or take deposits in this denomination currency.

As per RBI's FAQs, to redress grievances in case of deficiency of service, the complainant/aggrieved customer may first approach the concerned bank.

But if the bank does not respond within a period of 30 days after lodging the complaint or if the complainant is not satisfied with the response/resolution given by the bank, then the customer can lodge the complaint under the Reserve Bank - Integrated Ombudsman Scheme (RB-IOS), 2021 at the Complaint Management System portal of RBI.

The Integrated Ombudsman Scheme is meant for resolving customer grievances in relation to services provided by entities regulated by the RBI in an expeditious and cost-effective manner.

Read here: How will withdrawal of ₹2000 banknotes impact interest rates of bank deposits ahead?

While scrapping ₹2000 banknotes, RBI announced a period of four months for deposits and exchanges in this denomination.

Customers can either deposit ₹2000 banknotes at a bank without restrictions subject to compliance with extant Know Your Customer (KYC) norms and other applicable statutory/regulatory requirements.

The second method will be to exchange ₹2,000 banknotes up to a limit of ₹20,000 at a time. The exchange process will begin on May 23rd and will continue till September-end.

RBI said, "Members of the public may approach bank branches for deposit and/or exchange of ₹2000 banknotes held by them."

Read here: How will scrapping of ₹2000 banknotes impact Indian economy, banks?

It also needs to be noted that even a non-account holder is allowed to exchange ₹2000 banknotes up to a limit of ₹20,000/- at a time at any bank branch, as per RBI's FAQs.

The reason behind the withdrawal of ₹2000 banknotes is that they have completed their estimated lifespan and are not observed to be commonly used for transactions anymore.

₹2000 banknotes account for 10.8% of India's currency in circulation.