NEW DELHI: Governor of the Reserve Bank of India (RBI). Shakktanta Das said Monday most of the confiscated Rs 2,000 notes are expected to be returned by September 30.
Das spoke to reporters for the first time since announcing the surprise decision to confiscate the highest-denomination note, saying the decision was part of currency management.
Rs 2,000 notes remain legal tender, Das added.
India’s currency management system is very robust, the exchange rate has remained stable despite the crisis in the financial markets due to the war in Ukraine and the failure of certain banks in the West, he said.
The impact of the pullout on the economy was “very, very small,” he said, adding that Rs 2,000 notes accounted for just 10.8 percent of total cash in circulation.
He said Rs 2,000 notes were introduced primarily to replenish currency withdrawn after demonetisation in 2016, he said.
While the withdrawn Rs 2,000 notes can either be deposited into bank accounts or exchanged for another currency, banks have been advised to make the necessary arrangements for the exchange, he said.
“We expect most Rs 2,000 notes to be back in the treasury by September 30,” he said. “We already have more than sufficient amounts of printed banknotes in the system, not only at RBI, but also in the cash boxes operated by banks. There is no need to worry. We have sufficient stocks, no need to worry.”
RBI is aware of people’s difficulties and will issue regulations if necessary, he said.
The existing income tax requirement to provide PAN for deposits of Rs.50,000 or more in bank accounts will continue to apply to deposits of the Rs.2,000 banknotes withdrawn, he said.
Das said liquidity in the system is monitored daily.
Das spoke to reporters for the first time since announcing the surprise decision to confiscate the highest-denomination note, saying the decision was part of currency management.
Rs 2,000 notes remain legal tender, Das added.
India’s currency management system is very robust, the exchange rate has remained stable despite the crisis in the financial markets due to the war in Ukraine and the failure of certain banks in the West, he said.
The impact of the pullout on the economy was “very, very small,” he said, adding that Rs 2,000 notes accounted for just 10.8 percent of total cash in circulation.
He said Rs 2,000 notes were introduced primarily to replenish currency withdrawn after demonetisation in 2016, he said.
While the withdrawn Rs 2,000 notes can either be deposited into bank accounts or exchanged for another currency, banks have been advised to make the necessary arrangements for the exchange, he said.
“We expect most Rs 2,000 notes to be back in the treasury by September 30,” he said. “We already have more than sufficient amounts of printed banknotes in the system, not only at RBI, but also in the cash boxes operated by banks. There is no need to worry. We have sufficient stocks, no need to worry.”
RBI is aware of people’s difficulties and will issue regulations if necessary, he said.
The existing income tax requirement to provide PAN for deposits of Rs.50,000 or more in bank accounts will continue to apply to deposits of the Rs.2,000 banknotes withdrawn, he said.
Das said liquidity in the system is monitored daily.
