"No Need To Worry": RBI Governor Tackles Questions On Rs 2,000 Notes

People should not panic and rush to return or exchange their Rs 2,000 currency notes, Reserve Bank of India (RBI) governor Shaktikanta Das said today, a day before banks across India start the process of taking back the high-value notes. Even after September 30, the notes would continue to be legal, he asserted.

"There is no reason to rush to banks now. You have four months, till September 30," the RBI Governor told reporters, tackling questions on the government's decision to withdraw the Rs 2,000 notes introduced after the shock demonetization of November 2016, when Rs 500 and Rs 1,000 notes were scrapped overnight.

Mr Das said the deadline had been given so people would take it seriously and make an effort to return the currency notes.

Banks had been advised to make necessary arrangements for the exchange of Rs 2,000 notes from tomorrow, he said. "We have more than the required notes already available, already printed," Mr Das assured.

Dismissing reports about Rs 1,000 notes making a comeback, Mr Das said: "That's speculative. There's no such proposal right now."

The government announced on Friday that the notes would be withdrawn from circulation but gave people time till September 30 to either deposit these notes in their accounts or exchange them at banks.

Later, the State Bank of India clarified that people would be allowed to exchange the currency notes without any form or requisition slip. No identity proof will be required. Also, people can exchange Rs 2,000 rupee notes up to Rs 20,000 any number of times in a day.

On how the government would monitor black money if no IDs were required to exchange or return the Rs 2,000 notes, Mr Das said: "We have asked banks to follow their existing procedure. We have not asked them to do anything differently."

To a question on whether large cash deposits would be scrutinized, Mr Das said: "RBI never scrutinises deposits in banks. The Income Tax departments do that. Banks have a reporting system, and they will take care of this."

The RBI chief denied that the notes were being withdrawn as they were easily counterfeited. The 2,000-rupee notes were introduced for remonetisation, he said, and the security features of these notes had not been breached. High value notes, he added, were prone to cloning.

"Rs 2000 bank notes were introduced primarily to replenish the notes withdrawn following demonstration," the RBI chief said.

Mr Das said the RBI expects most currency notes of Rs 2,000 denomination to be returned to banks by September-end.

Notes of 2,000 rupees denomination make up 10.8% of the economy's currency in circulation with a value of 3.6 trillion Indian rupees ($44.02 billion), the RBI chief said.

"The withdrawal of 2,000-rupee notes will have a very marginal impact on the economy. 2,000 notes were hardly used, so economic activity will not be impacted," he said. "There are more than enough notes of smaller denomination in circulation."