After the demonetization action of the previous years, it has been decided by the Reserve Bank of India that 2000 rupees notes should also be taken back from the market. It is the highest-value currency note which is presently in circulation and the notes will continue to be on the legal tender.
The existing notes which might be with a person till now should be deposited or exchanged in the banks by 30th September. This has unleashed a fresh set of horror for all people who determined that their measures of demonetization are finally over. The notes which can be exchanged in the banks are at a limit of 20,000 INR at every single interval.
Notice By The Central Banks
The central bank has issued notices like the one which was released in November 2016. The demonetization action of the previous year included the deposition of 500 and 1000 INR notes. The old notes were withdrawn and it was stated that new notes will be out in circulation with the new pink 2000 INR note. The banks are presently advised to stop issuing the 2000 rupees notes with immediate effect so as to ensure that the notes are taken away from circulation as soon as possible.
The central bank has also informed that to ensure that operational convenience is maintained, the exchange of the 2000 INR notes must be done in only 20,000 INR amount each time. This can help to prevent the disruption of the regular activities of the bank branches all over the nation. The practice of note exchange started on 23 May. It is heartening to see that the government has taken a number of ideas from the demonetization process which had taken place a few years ago. It is also determined that the public will be given enough time to get their notes exchanged rather than putting humongous pressure on them like last time.
Ease In Exchange
The Reserve Bank of India has stipulated that the exchange of notes will continue for at least a few months. The banks will continue to exchange these notes till 30th September so that it becomes easier for the common people to get through the required procedure. Deposits into the bank accounts can be done in a usual manner. There will be no form of disruptions or restrictions regarding this. The applicable statutory provisions and extant instructions will not be provided until 30th September. Thus, this is the right opportunity to get the notes exchanged.
Ideas Behind This Demonetization
However, the general public was not happy with this declaration. The main reason for this is that the entire population remembers the harassment which had taken place during the demonetization of 2016. Despite this, an hour after the announcement had been made, a top official of the Reserve Bank of India mentioned that this is one of the routine procedures which every government has to undertake every once in a while. This is nothing different than the process which had taken place in 2005 and then again in 2013-14. The entire process is simply not prevalent in the economy of the nation. The governments of the European Federation and even the United States of America had taken these steps in the past.
The RBI official has also said that the main reason for taking back the 2000 INR notes is because these notes are not quite popular amongst the common people. Most of the notes are simply lying around and it will be in the best interest of the government to let these notes run their course and end their life cycle. Presently, these notes are just about 10 to 11% of the total economy of the nation. The demonetization of 2016 included the cancellation of the 500 INR notes which comprised about 80% of the nation’s economy. That is why the blow was so severe.
This official has also informed us that the decision was not taken by RBI alone. The Finance Ministry was involved in taking this decision to a great extent. This has led to a heated discussion on social media about the intentions of this government. There are a number of memes that have already been in circulation about the government taking web series too seriously and even rumors of what happened to the so-called integrated chip which had been set inside the 2000 INR notes. It is to be seen whether the government is able to accept this backlash.
The exchange of notes should not be a messy affair if the notes are taken to the bank. Each bank has received the required information about the note exchange procedure. We have to wait and see whether the changes affect the Indian economy or not.