Why you should not compare ₹2000 banknotes withdrawal to demonetisation?

  • 2000 banknotes withdrawal: The current development is quite different from the demonetisation of 2016 for several reasons.

Sangeeta Ojha
Updated22 May 2023, 07:07 AM IST
 <span class='webrupee'>₹</span>2000 banknotes withdrawal: This comes seven years after the notes were introduced in 2016 following the demonetisation move.
₹2000 banknotes withdrawal: This comes seven years after the notes were introduced in 2016 following the demonetisation move.(PTI)

2000 banknotes withdrawal news: The Reserve Bank of India (RBI) has decided to take 2,000 banknotes out of circulation. In a surprise move on Friday, the central bank announced the withdrawal of 2,000 currency notes from circulation but gave the public time till September to either deposit such notes in accounts or exchange them at banks. This comes seven years after the notes were introduced in 2016 following the demonetisation move. 

Withdrawal of 2000 currency notes is different from 2016 demonetisation

However, the current development is quite different from the 2016 episode for several reasons. In November 2016, the old 500 and 1,000 notes were invalidated overnight, the 2,000 notes will continue to be legal tender till September 30.

Vinit Khandare, CEO and Founder, MyFundBazaar said in contrast to demonetisation, when 500 and 1,000 notes, making up over 86% of the money in circulation, were invalid, neither the RBI nor the government had done so this time around for 2,000 notes.

These bills can still be used in transactions because the Reserve Bank of India has said plainly that they would continue to be considered legal money, he added.

The 2,000 notes make up just a relatively modest part of the total money in circulation at this time, in contrast to the 500 and 1,000 notes.

This is not the first time, the RBI has taken notes out of circulation. “There has already been a similar exercise, as the RBI announced in 2013–14 that beginning in March 2014, it would remove entirely from circulation all banknotes printed before 2005,” Khandare said.

As part of its clean note policy, the RBI occasionally performs such an exercise.

Meanwhile, people may approach bank branches to deposit or exchange their 2000 banknotes held by them

“Members of the public may approach bank branches for deposit and/or exchange of 2000 banknotes held by them. The facility for deposit into accounts and exchange for Rs2000 banknotes will be available at all banks until September 30, 2023. The facility for exchange will be available also at the 19 Regional Offices (ROs) of RBI having Issue Departments1 until September 30, 2023,” RBI said. 

Limit on deposit of Rs2000 banknotes into a bank account

Deposit into bank accounts can be made without restrictions subject to compliance with extant Know Your Customer (KYC) norms and other applicable statutory/regulatory requirements.

“With a view to minimise inconvenience to the public, to ensure operational convenience and avoid disruption of the regular activities of bank branches, all banks may exchange 2000 banknotes up to a limit of 20,000/- at a time,” the central bank said in its notification.

 

 

Catch all the Business News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

MoreLess
First Published:22 May 2023, 07:07 AM IST
Business NewsNewsIndiaWhy you should not compare ₹2000 banknotes withdrawal to demonetisation?

Get Instant Loan up to ₹10 Lakh!

  • Employment Type

    Most Active Stocks

    Tata Steel share price

    138.00
    03:57 PM | 14 NOV 2024
    -1.25 (-0.9%)

    Indian Oil Corporation share price

    134.80
    03:59 PM | 14 NOV 2024
    -1.2 (-0.88%)

    Tata Motors share price

    774.25
    03:58 PM | 14 NOV 2024
    -12.15 (-1.55%)

    Bharat Electronics share price

    281.05
    03:57 PM | 14 NOV 2024
    -0.4 (-0.14%)
    More Active Stocks

    Market Snapshot

    • Top Gainers
    • Top Losers
    • 52 Week High

    SKF India share price

    4,507.70
    03:57 PM | 14 NOV 2024
    -364.25 (-7.48%)

    Astrazeneca Pharma India share price

    6,740.65
    03:29 PM | 14 NOV 2024
    -392.45 (-5.5%)

    Torrent Power share price

    1,560.00
    03:29 PM | 14 NOV 2024
    -85.45 (-5.19%)

    P I Industries share price

    4,244.25
    03:29 PM | 14 NOV 2024
    -204.85 (-4.6%)
    More from Top Losers

    DCM Shriram share price

    1,291.05
    03:29 PM | 14 NOV 2024
    104.2 (8.78%)

    Network 18 Media & Investments share price

    84.78
    03:50 PM | 14 NOV 2024
    6.63 (8.48%)

    Eicher Motors share price

    4,885.55
    03:52 PM | 14 NOV 2024
    296.45 (6.46%)

    Jio Financial Services share price

    318.45
    03:58 PM | 14 NOV 2024
    19.05 (6.36%)
    More from Top Gainers

    Recommended For You

      More Recommendations

      Gold Prices

      • 24K
      • 22K
      Bangalore
      76,855.000.00
      Chennai
      76,861.000.00
      Delhi
      77,013.000.00
      Kolkata
      76,865.000.00

      Fuel Price

      • Petrol
      • Diesel
      Bangalore
      102.92/L0.00
      Chennai
      101.03/L0.23
      Kolkata
      104.95/L0.00
      New Delhi
      94.77/L0.00

      Popular in News

        HomeMarketsPremiumInstant LoanMint Shorts