RBI to reintroduce ₹1,000 currency notes? Governor Shaktikanta Das responds

Reserve Bank of India governor Shaktikanta Das on Monday made it clear that there was no plan to reintroduce ₹1,000 currency notes.

Addressing the media about the RBI’s recent decision to withdraw ₹2,000 currency notes and said the impact of the move will be “very very marginal” on the economy because it accounts for only 10.8 per cent of the currency in circulation.

When asked about the potential reintroduction of ₹1,000 currency notes, Das responded, “That’s speculative. There’s currently no proposal for such a measure.”

He emphasised that the current denominations of ₹500 and ₹100 are abundant and readily accessible to the public, alleviating any apprehensions about the central bank’s ability to manage without the highest-valued currency in India.

The governor highlighted the ample quantity of printed notes already present within the system, stressing their availability not only with the RBI but also at the currency chests managed by banks.

Das reiterated that ₹2,000 notes will retain their legal tender status even after the central bank’s decision to withdraw them from circulation. He also urged the public not to create a rush at bank branches, expressing his belief that there is no need for people to hastily visit banks.

₹2,000 notes withdrawal: What did RBI governor say on impact?

The RBI governor said the introduction of ₹2,000 bank notes aimed primarily at replenishing the notes withdrawn during demonetisation has served its purpose.

Further answering the questions arising on what will be the impact of the move, he said, “There will be no impact on economic activity.” He cited personal experience and informal surveys that reveal the limited usage of ₹2,000 notes in economic transactions.

News agency PTI reported that 89 per cent of the ₹2,000 denomination banknotes were issued before March 2017 and have reached the end of their estimated lifespan of four to five years.

The total value of these banknotes in circulation has significantly decreased from its peak of ₹6.73 lakh crore on March 31, 2018, (accounting for 37.3 per cent of the notes in circulation) to ₹3.62 lakh crore, constituting a mere 10.8 per cent of the Notes in Circulation as of March 31, 2023, the report further said.

Exchange to begin on Tuesday, deadline till September 30

Starting from Tuesday, the process of exchanging or depositing ₹2,000 currency notes will be facilitated, subject to the RBI’s current deadline of September 30. Individuals can exchange a maximum of 10 currency notes at a time, while the existing Income Tax requirement of PAN for deposits of ₹50,000 or more will be applicable to ₹2,000 notes as well.

Notably, the State Bank of India has announced that no ID proof or requisition slips will be necessary to exchange ₹2,000 notes. In anticipation of the summer season, the RBI has instructed banks to ensure suitable infrastructure at branches, including shaded waiting areas and drinking water facilities. Banks are also required to maintain daily data on the deposit and exchange of ₹2,000 banknotes.

However, the governor of the central bank mentioned that the September deadline may be revisited based on the prevailing circumstances.