Still have Rs 2,000 notes? Here’s what happens if you miss 30 Sept deadline

In May, the Reserve Bank of India announced that Rs 2,000 currency notes would be withdrawn from circulation.

The central bank added that the Rs 2,000 notes currently in circulation could either be exchanged or deposited into bank accounts by 30 September.

Now, the RBI deadline is just five days away.

But what happened exactly? And what happens if you don’t deposit your old notes into your bank account?

Let’s take a closer look:

What happened?

The Rs 2,000 note was introduced in November 2016 after Prime Minister Narendra Modi’s shock demonetisation announcement which withdrew the legal tender status of all Rs 500 and Rs 1,000 bank notes that were in circulation.

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As per Bloomberg, the Rs 2,000 note fast became a favourite currency and the note of choice for large cash deals.

The central bank in May, announcing the withdrawal of the currency, added that the notes would remain legal tender.

The central bank added that the notes can be exchanged for any other denominations up to a limit of Rs 20,000 at a time at any bank starting from 23 May, 2023.

The RBI also announced that banknotes can be exchanged up to the specified Rs 20,000 limit at its 19 regional offices with Issue Departments.

It said no limit would be placed upon the deposits made into accounts.

The RBI at the time also advised banks to stop issuing Rs 2,000 denomination notes with immediate effect.

According to the RBI, 93 per cent of Rs 2,000 notes in circulation on 19 May – the day of the announcement – have been returned till 1 September.

RBI, quoting from data received from banks said that of the bank notes returned from circulation, around 87 per cent were deposited.

The remaining 13 per cent were been exchanged for other denomination notes.

The RBI said withdrawal of the Rs 2,000 notes would have minimal impact on the liquidity in the system.

The total value of Rs 2000 banknotes in circulation, which amounted to Rs 3.62 lakh crore on 31 March, 2023, had declined to Rs 3.56 lakh crore as at the close of business on 19 May, 2023.

The central bank pegged the total value of Rs 2,000 banknotes returned from circulation at Rs 3.32 lakh crore till 31 August.

"Consequently, Rs 2000 banknotes in circulation as at the close of business on 31 August, 2023, stood at Rs 0.24 lakh crore. Thus, 93 per cent of the Rs 2000 banknotes in circulation as on May 19, 2023, have since been returned," the RBI stated.

What happens if you miss the deadline?

As per Bloomberg, the notes will remain legal tender even after the 30 September deadline passes.

However, citizens will be unable to conduct any transactions with them.

BQPrime quoted sources as saying that banks may not allow the notes to be deposited or exchanged after the deadline.

Citizens will have to get the notes exchanged at the RBI’s regional offices.

Citizens will also have to elaborate on the reason why they could not deposit or exchange the notes before the 30 September deadline, as per Bloomberg.

Business Today quoted RBI governor Shaktikanta Das as saying in May a decision relating to the status of the notes would be made as the 30 September deadline nears.

As per the outlet, this leaves the status of the Rs 2,000 notes as legal tender up in the air.

“So, the answer to the question - can you use Rs 2000 notes after September 30 - that's perhaps bothering many who have Rs 2,000 notes with them is we don't know just yet. And, we will have to wait for the next RBI announcement closer to 30 September,” the piece states.

“I can’t give you a speculative answer as to what will happen after September 30. We have not said that the legal tender status (of the Rs 2,000 notes) will continue only up to 30 September,” the RBI governor said in May.

Das also stated that the withdrawal of the Rs 2,000 notes would have minimal impact on the liquidity in the system.

BQPrime said a response from the RBI on the matter is awaited.

Some people in Delhi on Saturday claimed banks were refusing to exchange notes and demanding customers deposit them instead.

The RBI on Saturday stated that no slip would be required to exchange notes.

With inputs from agencies