Last Update: May 19, 2023, 21:02 IST
This decision may have been taken keeping in mind the ultra-rich who have hoarded Rs 2,000 notes as black money and now they have to declare it.
“Thanks to the advent of digital payments and especially UPI in the last six years, a vast majority may not even have a Rs 2,000 note at home. Given a period of over four months, it would be difficult to exchange or deposit There is no immediate need to do so,” said an official.
The Rs 2,000 bank note will remain valid even after September 30 this year and government officials believe that most common people, especially those in rural areas, may not have a single Rs 2,000 bank note with them at present.
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Advising against any panic, an official said the government has not gauged the wider impact of the decision to withdraw the Rs 2,000 note, as it feels most people, especially in rural India, will Dealing with Rs 500, Rs 200 or Rs 100 notes. Most people will not have even a single 2000 rupee note. “It is also thanks to the advent of digital payments and especially UPI in the last six years, which means that many common people may not have even a single Rs 2,000 note at home,” said an official.
The government official explained that there is no immediate need to exchange or deposit the Rs 2,000 note in a bank in view of the period beyond four months.
The decision could be taken keeping in mind the ultra-rich who have hoarded Rs 2,000 notes as black money and now they have to declare it. Recently Income Tax (IT), Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) conducted raids in various parts of the country, large hoards of Rs 2,000 notes were recovered. This may have acted as an input for the decision.
The Reserve Bank of India (RBI) stated that the total value of Rs 2,000 notes in circulation by March 31, 2023 is Rs 3.62 lakh crore, which is only 10.8% of the notes in circulation. “It is also observed that this denomination is not commonly used for transactions,” the RBI said.
The decision also comes ahead of the general elections in the country, which are less than a year away.
However, there is a concern that the general public will stop accepting Rs 2,000 notes from now on, so people, even if they have one or two Rs 2,000 notes in urban centres, may not be able to exchange them for fear of cash crunch. Will have to run to the banks for it. Sources are therefore clarifying that the Rs 2,000 note will remain valid even after September 30, 2023.
The RBI has said that starting May 23, the limit for exchanging Rs 2,000 notes into notes of other denominations at any bank can be increased to Rs 20,000 at a time. To deposit and/or exchange Rs 2000 bank notes on September 30, 2023,” RBI said.
