How will scrapping of ₹2000 banknotes impact Indian economy, banks?
Analysts and economists do not see a major disruption from withdrawal of ₹2000 banknotes, compared to the impact that was seen in demonisation of old ₹500 and ₹1000 in November 2016. The ₹2000 notes move is also expected to improve banks liquidity system.
Another Indian currency denomination is going to be withdrawn from circulation. This time it is the highest banknote ₹2000 which will not be issued by banks anymore. However, RBI has directed banks to help customers in exchanging their ₹2000 notes or deposits in this denomination. One can't help but remember the so-called demonetisation move that hit the country in November 2016. However, there is a difference though. The withdrawal of ₹2000 banknotes is not expected to be less disruptive than compared the scrapping of 86% of India's currency in circulation over 6 years ago.