RBI likely to extend 30 September deadline to return ₹2000 notes

The Reserve Bank of India (RBI) is likely to extend its September 30 deadline to return ₹2000 notes till October end, senior official familiar with the development told Moneycontrol. “It looks like the RBI will extend the date for deposit and exchange of ₹2,000 notes by at least for a month because it has to factor in the non-resident Indians as well as others living overseas," senior official said as quoted by the daily.

On 2 September, the RBI had said that as much as 93 percent of ₹2000 banknotes that were in circulation on May 19 have been returned to banks. Data collected from major banks indicates that out of the total banknotes in ₹2000 denomination received back from circulation, about 87 per cent is in the form of deposits and the remaining around 13 per cent has been exchanged into other denomination banknotes.A report by Bloomberg also stated that there is still almost 240 billion rupees or $2.9 billion worth of the notes in circulation. While the vast majority of the 3.56 trillion rupees have since been banked, 7 percent of the notes remained in circulation as of September 1, the report stated.

The ₹2,000 denomination banknote was introduced in November 2016 under Section 24(1) of the Reserve Bank of India (RBI) Act, 1934, to expeditiously meet the currency requirement of the economy post-withdrawal of the legal tender status of all ₹500 and ₹1000 banknotes in circulation at that time. According to MoS Pankaj Chaudhary, the objective of introducing the notes was met once banknotes in other denominations became available in adequate quantities. “In view of the above and in pursuance of RBI’s ‘Clean Note Policy’, it was decided to withdraw the currency notes,” he said.