MUMBAI: India’s highest value banknote will be withdrawn in less than a week – and there are still nearly 240 billion rupees ($2.9 billion) worth of notes in circulation.
The Reserve Bank of India ordered the withdrawal of the 2,000 rupee note on May 19, giving people until the end of September to exchange or deposit it at banks. While the vast majority of the 3.56 trillion rupees have been in the bank since then, 7% of notes remained in circulation as of September 1.
The pink 2,000 rupee note was introduced in November 2016 to remonetize the economy, following Prime Minister Narendra Modi’s shocking decision to remove 1,000 and 500 rupee notes as legal tender overnight, as part of an anti-corruption campaign. It quickly became a favorite store of value and the bill of choice for big cash deals.
In its withdrawal statement, the RBI said the notes had served their purpose and were not often used. It also referred to its “clean notes policy” to replace soiled notes within four to five years.
The announcement in May led to a mini consumption boost for the Indian economy, with local media reporting crowded jewelry stores selling gold at a premium.
The notes will remain legal tender even after September 30, but will not be accepted for transaction purposes and can only be exchanged at the RBI. The holder will have to explain why the general deadline could not be met.
The Reserve Bank of India ordered the withdrawal of the 2,000 rupee note on May 19, giving people until the end of September to exchange or deposit it at banks. While the vast majority of the 3.56 trillion rupees have been in the bank since then, 7% of notes remained in circulation as of September 1.
The pink 2,000 rupee note was introduced in November 2016 to remonetize the economy, following Prime Minister Narendra Modi’s shocking decision to remove 1,000 and 500 rupee notes as legal tender overnight, as part of an anti-corruption campaign. It quickly became a favorite store of value and the bill of choice for big cash deals.
In its withdrawal statement, the RBI said the notes had served their purpose and were not often used. It also referred to its “clean notes policy” to replace soiled notes within four to five years.
The announcement in May led to a mini consumption boost for the Indian economy, with local media reporting crowded jewelry stores selling gold at a premium.
The notes will remain legal tender even after September 30, but will not be accepted for transaction purposes and can only be exchanged at the RBI. The holder will have to explain why the general deadline could not be met.
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