Rs 2,000 withdrawal: Very few inquiries at branch level

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If the withdrawal of Rs 500 and Rs 1,000 banknotes during the demonetisation in late 2016 drive created chaos, the Reserve Bank’s carefully calibrated decision to withdraw Rs 2,000 notes from circulation by September will not unleash anything close, if indications in the first 72 hours since the announcement is anything to go by.

Bank employees said there was no rush or even eager inquiries from the people to deposit or exchange 2,000 notes till noon on Monday.

“Though branches were open on Saturday, the first day after the RBI announcement, there has been almost no inquiries either on that day or today,” an officer of Punjab National Bank in Kolkata told Money9.  Another employee of Bank of Baroda in Howrah echoed him. “It’s normal business. There have been just two-three inquiries. Customers are not lining up to deposit Rs 2,000 notes in their accounts,“ he said. In Ghaziabad, an HDFC Bank staffer since the exchange will begin from May 23, the actual demand will be known then.

Exchange from May 23 The banks will start exchanging Rs 2,000 notes from Tuesday, May 23. However, account holders can deposit such notes in their accounts anytime.

If there is a marked difference from the frenzy and disorder that followed the 2016 announcement of demonetisation, it appears to be due to the calibrated retreat of the central bank from printing and circulating Rs 2,000 notes since 2018-19.

Over the past few years, the sight of 2,000 notes has been becoming rarer and rarer in public. ATMs have markedly dispensed fewer and fewer such notes even in cities where the demand for cash has always been high.

Newspaper reports have quoted ATM industry executives and stated that only 3-5% of the 2.6 lakh automated teller machines have 2,000 notes. This number includes white-label ATMs as well.

ATM management With the RBI announcement, bank managements have instructed ATM management companies not to load these notes in the machines anymore.

ATM sector executives said that they would not take more than 48 hours – May 24 the latest – to clean out the last such note from the automated machines all over the country.

While Rs 2,000 notes constituted 37.3% of the notes in circulation in the country by value, their share dropped to a mere 10.8% by March 2023.

Interestingly, the 166 mm X 66 mm sized note printed in magenta that also carried the denomination embossed in braille apart from the 17 Indian languages, was the highest in value in the history of the country. Ironically, it had the shortest lifespan – about six years and a half.