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New Delhi
Amid the kerfuffle surrounding the withdrawal of Rs 2,000 notes from circulation, Reserve Bank of India Governor Shaktikanta Das on Monday explained why such a decision was taken. Das asserted the currency continues to be a legal tender, adding that decision was part of the central bank's currency management exercise.
"Let me clarify and re-emphasise that it is a part of the currency management operations of the Reserve Bank..for a long time, the Reserve Bank has been following a clean note policy," said Das.
"From time to time, RBI withdraws notes of a particular series and issues fresh notes...we are withdrawing the Rs 2000 notes from circulation but they continue as legal tender."
The RBI governor added that the September deadline had been granted so that the "process will be taken seriously".
Das emphasised that Rs 2,000 notes were primarily issued in circulation to quickly replenish the value of money which was being taken out from the system.
The RBI governor was referring to the 'demonetisation' process initiated in 2016 by the central bank where old Rs 1,000 and Rs 500 notes were taken out of the system.
WATCH | State Bank of India: No identity proof needed to exchange 2000-note
How to exchange the currency?
Apart from banks exchanging the notes, the facility for the same up to Rs 20,000 limit will also be provided at the 19 Regional Offices (ROs) of the RBI, starting May 23, said a press release issued by India's central bank.
“The exchange facility for Rs 2,000 banknotes up to Rs 20,000 at a time would be available from May 23,” the RBI said in a statement, advising the banks to stop issuing Rs 2,000 denomination banknotes with immediate effect.
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The 2,000 banknotes had been dwindling in circulation for the past few years. According to the finance ministry's report tabled in Parliament in December 2022, the notes of Rs 2000 denomination in terms of value to the total notes in circulation dipped from 22.6 per cent (March 31, 2020) to 13.8 per cent at the end of March 31, 2022.
(With inputs from agencies)
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