After introducing Rs 2,000 currency notes post-demonetisation in 2016, the high-value note seems to have lost its sheen in three years. As part of stopping the use of Rs 2,000 notes, several banks reportedly initiated the process to recalibrate their ATMs in a bid to completely replace the notes with low denomination notes, said a news report.
As part of the move, state-run Indian Bank reportedly stopped filling the high-value denomination notes from 1 March at its automated teller machines (ATMs), said another news report.
Though efforts are underway to recalibrate about 240,000 ATMs to replace Rs 2,000 notes with Rs 500 notes, the high-value notes may not be withdrawn immediately and will remain legal tender, for now, said a report in the Business Standard.
Accordingly, three of the four currency cassettes in the vending machines will be filled with Rs 500 notes, and the fourth one will either be used to stash notes of Rs 100 or Rs 200 denominations, the report said.
Gradually, Rs 2,000 notes are expected to be withdrawn completely from circulation in a span of one year even as the banks have reportedly replaced the cassettes holding Rs 2,000 notes in many ATMs and may well be on their way out within a year.
Indian Bank reportedly said that it would not use Rs 2,000 notes in its ATMs from 1 March due to inconvenience to people.
Indian Bank has been facing a problem with on-site ATMs (those located within a bank's branch) due to the loading of the high-value denomination notes and now on, the public sector bank's ATMs will have only Rs 100, Rs 200 and Rs 500 notes, the report said.
"Customers would step into the branch as soon as they withdrew cash from the ATM, asking for Rs 2,000 notes to be exchanged for notes of smaller denomination. They were just crowding our branches with long queues. So, we have decided to do away with Rs 2,000 notes," a bank official was quoted as saying in the report.
Early this month, it was reported that a top public sector bank (PSB) had reportedly issued instructions to its senior officials to restrict the circulation of Rs 2,000 currency notes. The officials were also asked not to create panic among customers. They were asked to accept the notes from bank customers.
The branch officials were asked to fill only the denominations of Rs 500, Rs 200 and Rs 100 in ATMs and to meet the possible inconvenience arising out of the situation.
The supply of Rs 100 notes will be increased through currency chests, said the report citing an email of the PSB. The report, however, did not mention the name of the PSB.
In October last year, the Reserve Bank of India (RBI) had informed that it had not printed a single banknote of Rs 2,000 denomination in FY20 as it had stopped the printing of the high-value denomination notes temporarily on security grounds.
Experts said that the purpose behind the move to scale down and finally stop the printing of the high-value notes was reportedly an attempt to prevent easy hoarding, which defied the government’s initiatives to curb black money flow.
Keeping Rs 2,000 currency notes away from circulation is seen as a measure of a crackdown on black money as the lack of presence of this note will make illegal transactions deals difficult, said the report citing views of the experts.
Earlier, there were unconfirmed reports claimed that the RBI was not printing Rs 2,000 denomination notes due to security reasons.
About 3,542.991 million notes of Rs 2,000 denomination were printed during fiscal 2017 and in the next financial year, the number saw a dip as the central bank printed only 111.507 million notes of the same denomination.
The figure further fell by more than half, to 46.690 million Rs 2,000 notes in FY19, the report said.
The Rs 2,000 denomination notes were introduced after demonetisation in 2016. The government had then announced to withdraw Rs 1,000 and Rs 500 denomination notes from the market in a bid to check black money and fake currency.
Accordingly, the government first introduced a new Rs 500 denomination currency note and subsequently came out with Rs 2,000 notes.
About 3,285 million notes of Rs 2,000 denominations were in circulation in 2017, according to data available on RBI website. This figure had gone up to 3,363 million in 2018 and it declined to 3,291 million notes in FY19.
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Updated Date: Feb 26, 2020 14:01:35 IST