Governor of the Reserve Bank of India, Shaktikanta Das, stated on Monday that the withdrawal of Rs 2,000 currency notes would have a minimal impact on the economy since these notes only accounted for 10.8% of the currency in circulation.
Das described the withdrawal as part of the Reserve Bank of India’s currency management operations, expressing his expectation that the majority of the withdrawn Rs 2,000 notes would be returned by the September 30 deadline.
He emphasized that Rs 2,000 notes were not commonly used in transactions and their withdrawal would not significantly impact economic activity, according to the Press Trust of India (PTI).
Das explained that the RBI had previously conducted similar exercises of currency withdrawal, such as in 2013-14 when notes printed prior to 2005 were withdrawn from circulation.
Regarding the legal tender status of ?2,000 notes, Das confirmed that they would continue to be accepted, but he refrained from speculating on the post-September 30 scenario, waiting to assess the number of notes returned.
He expressed the expectation that most of the notes would be returned and that RBI would decide accordingly as the September 30 deadline approached.
Das assured the public that there was ample time to exchange or deposit the notes in bank accounts and advised against panic. He stated that the system had sufficient stock of notes, eliminating the need for concern.
Addressing the potential difficulties faced by individuals on long foreign visits or living abroad on work visas, Das assured that RBI would make efforts to address their concerns and ensure a smooth process.
In response to a question about the return of black money to the system, Das stated that there were existing procedures for deposits and cash exchange, and banks were required to follow the established rules. He mentioned the income tax rule of producing PAN for cash deposits exceeding Rs 50,000, indicating that the existing regulations would apply.