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  • Category: Finance & Money Matters

    2000 Rupee currency note withdrawn

    WOW, what a hot news-fresh from the oven!

    Even before the voices on the last Demonetization has not fully died down, even when the Karnataka debacle shock is still under microscopic evaluation by BJP , here is another news with large bytes for media.

    The Two thousand rupees currency note is withdrawn by RBI and people are given some time of about more than four months to exchange the two thousand denomination currency notes already with them.

    How do you se this? I am sure not many people will have much stock of the 2000 notes with them as most of us are scared after last demonetization.

    I was expecting this to come as I was noticing that banks were not giving 2000rupee notes for past many months. Even I could notice very less number of such notes in the usual business transactions. I don't know about high value transactions in jewellery or real estate or any such high value business.

    Members please discuss thoroughly on the reason and justification by government or RBI, probable difficulties to be faced by ordinary people, big traders ,politicians and the benefit or impacts to the overall economy.
  • #26912

    I came across this news yesterday and at home we were discussing whether any of us had any Rs.2000 note left by chance! A few banks do still have this particular currency note and are giving them to customers who specifically ask for them as it is convenient to carry fewer notes for certain occasions, let's say, on a trip or when purchasing things or paying for services for a marriage.

    As per the news report, banks will exchange the Rs.2000 currency note up to a limit of Rs 20,000 only, starting from 23rd May 2023. We can currently continue to use them for transaction and also receive them, but RBI has made it mandatory to deposit and/or exchange these banknotes up to 30th September 2023 (the last date to do so).

    Now I am sure that those who were hoarding these notes for nefarious activities, including black marketeers, will be scrambling to get rid of them.

    How will it affect the economy? Here's what I think- While it may affect high value businesses as you mentioned, like builders, traders of commodities like pulses or cotton or vegetables who transact on a large scale, and jewellers, etc. by and large I do not see a major impact considering these notes are not in as large a circulation as earlier. Also, the traders and high end business people do have sufficient time to deposit the notes in the bank and get lower denomination notes. And let's not forget that more and more transactions have gone online through NEFT, mobile apps, etc.

  • #26917
    I have not checked, but I feel that I may not have 2000 rupees currency note with me. If at all I have, that may be just one or two piece kept for Diwali Pooja or as a sample. Anyway I have not yet checked by savings/pooja box yet. I am not in a hurry also.

    I a sure with digital payment transactions almost everywhere and more with small traders and footpath vendors, the ordinary people will not suffer at all. Whether the same applies to 'big' people, I am not sure.
    The current action will infuriate still more the vested interests who pump fake notes to India. Sure they would have tried their hands on 2000 rupee also. So again a loss to them. Similarly if any had illegally and unaccounted hoarded the big currency., thy also may be at loss and difficulty.
    So this time the expressly vocal opposing will be subdued, and limited to the political sides opposed to central govt ruling party and the 'intelligentsia and media 'also opposed to the NDA/BJP, and the agents and supporters of those who are always keep anti-Indian government stand.

  • #26918
    I went to the bank today to deposit some cash. I asked the person there what will be the implications of the 2000 note. Below are some of the insights he gave me:
    1. I will be able to deposit any number of 2000 Rupees notes in the bank till 30th September 2023. There is no limit on how many notes can be deposited.
    2. Many banks have cash deposit machines. There is not yet clarity on how many notes can be deposited through cash deposit machines.
    3. To exchange 2000 Rupees notes into smaller denominations, one can get a maximum of Rs 20,000 per day.
    4. Through the last few weeks, whenever I tried to deposit a 2000 Rs note, the Cash Deposit Machine declined. Although, it may be a problem with the machine. I did deposit in another CDM of the same bank, and the note was accepted.

    In any case, such note bans whether staggered or sudden, are necessary to wash out currency corruption.

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  • #26925
    As mentioned by other members, I also feel it is a good move and there may not be any issue in this regard for many common people. As far as I am concerned, I have no stock of Rs.2000/- notes.
    These days we are not seeing any Rs.2000/- notes in circulation. Some may be having a few but as sufficient time is given exchanging them is not a big issue. Some politicians and people in the real estate business may have some problems. When they bring huge cash to the bank to deposit they have to declare the source of income also. How it will be managed by them is to be seen.
    I also feel it is good once in a while to withdraw currency notes of a higher denomination.

  • #26926
    Today I listened to a wonderfully detailed explanation. That started from the 2016 demonetization and progress of the economy and the justifications and need for the withdrawal of the 2000rupees currency note now.

    It is explained that the 2000 rupee note was introduced as a Bridge Currency. Hence it has to be withdrawn after some period once, the disturbance is over and stability returns. Banking circles are aware that RBI has been tapering the active circulation of 2000 rupee notes since 2019, gradually, by not reissuing them for circulation. From 2019, once the 2000rupee notes are deposited or remitted at Currency Chests, they are not re-issued but given only 500 rupee and lesser denomination currencies for circulation.
    From the data of the total value of 2000 rupee notes issued, the amount now retained at RBI currency chests, the value of 2000 notes in active circulation etc., RBI could have evaluated the amount of non-active(unaccounted or hoarded) 2000 rupee notes outside. This will be unearthed after the withdrawal announcement.
    But this kind of demonetization followed by another withdrawal and the measures taken to unearth illegal money and funding etc. will send a strong message and bring more and more people into proper tax and accounting stream. This will be a booster again to clean the economy.

  • #26932
    Today's newspaper brought a timely alert by RBI not to panic, that the economy would not be affected. RBI also scotched the silly rumours that Rs.1000 denomination notes would be introduced. They have also instructed banks to be prepared and to provide sufficient drinking water facilities and shade.

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