RBI extends the deadline to deposit and exchange Rs 2,000 notes to Oct. 7

The special operation to remove Rs 2,000 bank notes from circulation was extended by the Reserve Bank on Saturday for an additional week, till October 7.

The central bank said that since May 19, when it announced plans to remove Rs 2,000 notes from circulation, the public has deposited or exchanged 3.42 lakh crore of such notes into the system.

The Reserve Bank said in a statement that the money returned represents 96% of the Rs 2,000 bank notes in use as of May 19. It added that just Rs 14,000 crore of these notes are still in use.

Before, September 30, 2023, was the last day to deposit or exchange notes of Rs 2,000.

According to a statement from the central bank, “it has been decided to extend the current arrangement for deposit/exchange of Rs 2,000 banknotes until October 07, 2023.”

It had unexpectedly announced the removal of Rs 2,000 notes in May, but insisted that it wasn’t similar to the demonetisation process that was carried out in November 2016 in which Rs 500 and Rs 1,000 notes were deemed illegal cash over night.

In May 2023, the RBI said that the introduction of the bigger denomination notes had achieved its intended goal of hastening the remonetization of the economy. Concerns over the caliber of the notes in circulation also existed since it had ceased issuing the notes from FY19.

The decision to remove Rs 2,000 notes had some unexpected effects, including as assisting banks in reporting larger deposit growth—a difficult issue for the system for a while.

The RBI urged the people to deposit or swap the Rs 2,000 notes “without any further delay” despite saying that they “shall continue to be legal tender” even after October 7.

According to the announcement, beginning on October 8, deposit/exchange services in bank branches will no longer be available. Instead, customers must swap their items at one of RBI’s 19 offices.

There is no limit for notes presented at RBI offices for crediting into bank accounts, however there is a ceiling of Rs 20,000 per transaction for notes being exchanged.

The announcement said that anyone inside the nation may also send Rs 2,000 notes by India Post, addressed to any of the 19 RBI Issue Offices, for credit to their Indian bank accounts, but added that such a transaction would be subject to government regulation and documentation requirements.

The RBI also said that any public authority participating in inquiry or enforcement actions, including courts, law enforcement agencies, government departments, or other public bodies, may deposit or exchange notes worth Rs 2,000 at any of its offices without any restrictions.

“Until further advice,” the RBI said, “the facility for deposit/exchange of Rs 2,000 banknotes at the 19 RBI Issue Offices shall be available.”