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Rs 2000 Withdrawn: Why did RBI withdraw 2000 notes? SBI disclosed in its research

Bynewshuntexpress

Jun 19, 2023

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Rs 2000 Withdrawn:
The Reserve Bank of India (RBI) had decided to withdraw Rs 2000 notes from circulation under its currency management. Now State Bank of India (SBI) has told in a new research that the Reserve Bank has withdrawn 2000 notes to promote deposits and consumption.

SBI has told in the research that it is also likely to boost economic development. SBI has explained in a report how the withdrawal of Rs 2000 notes can boost bank deposits, loan repayments, consumption, RBI’s retail digital currency usage and overall economic growth.

Rs 2000 Withdrawn

RBI had decided to withdraw Rs 2000 denomination notes from circulation on May 19, 2023. But legally it will continue to exist. That is, no one can refuse to take it. However, the RBI had advised banks to stop issuing such notes with immediate effect.

RBI introduced Rs 2000 note in November 2016 under Section 24(1) of the RBI Act, 1934. At that time this note was mainly introduced to rapidly meet the currency requirement of the economy after the withdrawal of legal tender status of all Rs 500 and Rs 1000 notes.

The printing of Rs 2000 notes was discontinued in 2018-19 after the purpose of introducing Rs 2000 banknotes was served. RBI Governor Shaktikanta Das after demonetizing Rs 2000 notes had said that 50 per cent of Rs 2000 notes were already back in the system after the May 19 announcement.

RBI Governor Shaktikanta Das said after the monetary policy meeting, ‘Till now a total of Rs 2000 notes worth about Rs 180,000 crore have been returned. About 85 percent of those notes have returned as deposits to bank accounts.

“Though some amount will be withdrawn after deposits, going by the current trends, this measure is likely to lead to an increase in CASA deposits (Rs 1.5 lakh crore),” said the SBI Research report.

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