₹2,000 note withdrawn: No need to rush to banks, says RBI governor

Reserve Bank of India governor Shaktikanta Das responded to questions from the media about the withdrawal of the ₹2000 notes.

Highlighting that there was no need for people to rush to banks, the governor explained the need for having a deadline for exchanging the notes. He said that the deadline has been set so that this exchange exercise is taken seriously. Without a deadline, this process could become endless.

The governor reiterated that this was part of the currency management operations of the RBI and falls under the RBI's clean note policy. Under the clean note policy, RBI is required to not issue notes which are excessively soiled, defaced, or damaged. He explained that RBI withdraws currency notes of particular series and issues fresh notes from time to time. A similar exercise was undertaken in 2013-14, where notes printed prior to 2005 were withdrawn and the public could come and exchange the notes.

"This time we are withdrawing ₹2000 notes from circulation. but they continue as legal tender", the governor added, saying that the purpose of printing the ₹2000 notes has been fulfilled.

On the question about what the impact on the economy will be, the governor said that it would be 'very marginal'. He also added that the Indian currency management system is very robust and that there is more than an adequate quantity of printed notes in the system to compensate for the ₹2000 notes that will be taken out of circulation.

On Friday, RBI announced that ₹2000 notes would be withdrawn from circulation but would continue to remain as legal tender. An exchange/deposit facility of ₹2000 notes will be available from 23rd May to 30th September at any bank branch. The exchange facility will have a limit of ₹20,000.