Governor of Reserve Bank of India Shaktikanta Das said on Monday (June 26) that the impact of the withdrawal of Rs 2,000 currency notes on the economy will be “very very marginal” as the notes accounted for only 10.8 per cent of the currency in circulation.
He described the withdrawal exercise as being part of the currency management operations of the Reserve Bank of India. He said he expected most of the withdrawn Rs 2,000 notes to be returned by September 30, which is the deadline to return the notes.
“As you know that Rs 2,000 notes were not commonly used in any transaction … We have found that it is hardly being used for carrying out transactions. Therefore, economic activity will not be impacted,” he said as per Press Trust of India (PTI)
“As part of a clean note policy, he said, RBI has been conducting such exercise of withdrawal of currency notes from time to time and such exercise was undertaken in 2013-14, whereby the notes which were printed prior to 2005, were withdrawn from public circulation.”
Asked if ₹2,000 notes will continue to be legal tender, Das said, “It will continue as legal tender. We will wait how many notes are coming. I cannot give a speculative answer about what will happen post-September 30.”
“Most of the notes are expected to come back,” he said, adding “that is our expectation at this stage. We will see how many notes come back. And as we approach September 30, we will decide at that stage.”
No need to panic
Das said that there was enough time available for people to exchange and deposit the notes in bank accounts so there was no need to panic.
The governor explained that there were more than adequate notes available in the system.
“So there is adequate stock available and there is no reason to worry whatsoever. We have more than sufficient stocks,” he said.
He stressed that RBI was sensitive to difficulties possibly faced by Indians on long foreign visits or those who are living in other countries on work visas.
“It will be our endeavour to address the difficulties of the people and to complete the entire process in a smooth manner,” he said.
To a question regarding black money coming back to the system, he said, there is a set procedure for deposits in your account or cash exchange.
“What we have said is that the existing requirements or the existing procedures have to be followed by the banks. We have not come out with an additional procedure. You must be aware that there’s an income tax rule if you deposit cash above Rs 50,000 then you have to produce your PAN. So existing rules will apply,” he said.
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