We are sure that many of you, like us, would not have noticed the short flow of Rs.2,000 denomination notes lately. However, there is such a thing. Having a general conversation with your friends and colleagues, you will hear rumours about the possibility of another round of demonetisation around the corner. Are the restricted flow of higher denomination notes proving this? Are the banks confirming these rumours?
There is no answer with a flat ‘yes’ or ‘no’ to these questions as yet. Many Public Sector Undertaking (PSU) banks have decided to stop circulating Rs.2,000 notes through ATMs. They have also been using low-value notes replacing the high-value ones.
Some banks have internally announced that they will be pausing the distribution of the notes. It has also caused a lot of inconvenience to the public as they are not able to exchange the high-denomination notes at the retail stores as the storekeepers are unsure if they could accept it or not. The public is only left with the option of stepping into the bank branches to exchange the notes. This option is defeating the purpose of digital banking services.
Also Read: 6 Factors Leading to the Growth of the Gig Economy in India
Despite the rumours and inconveniences, the Reserve Bank of India (RBI) has surrendered to silence at the moment. It is not yet clear if the RBI is planning to come up with a new, more secure bunch of notes.
A report states that the banks are returning the soiled Rs.2,000 notes to the RBI. Indian Bank has clarified that it will continue to accept Rs.2,000 notes from customers during deposit transactions. As for the Rs.2,000 notes left in the currency cassettes in ATMs after 1 March 2020, the branches will unload the notes as per the decrease cash transaction. The bank said it would follow the standard procedure for the same according to Section 3.3 for implementing the online account of ATM/BNA cash operations.
Despite the inconvenience caused, banks have stood on their decision to identify illegal cash hoarders. It is speculated that the bank staff are closely watching on customers who convert more than a crore of rupees held in Rs.2,000. Every time a suspicious customer is noticed, the details of such customer is shared with the RBI. Even suspicious cash deposits that do not match the customer’s profile is being noted and shared with the RBI.
Another round of demonetisation would be agonising and may affect the economy negatively. However, the National Investigation Agency (NIA) claimed that there had been high-quality fake notes during the previous year in circulation, putting the Indian economy in trouble. Therefore, demonetisation may be inevitable to put the circulation of fraud notes on hold.
For any clarifications/feedback on the topic, please contact the writer at apoorva.n@cleartax.in
