No form, ID needed to exchange Rs 2,000 currency note: State Bank of India

Banks ask ATM operators to withdraw such notes from cash-dispensing machines

State Bank of India has informed all its branches that no form or identity proof would be needed to exchange Rs 2,000 currency notes, even as it reiterated the one-time limit of Rs 20,000 for depositing or exchanging the banknote.

The clarification came as social media was flooded with pictures of a ‘form’, which would have to be filled to deposit or exchange the Rs 2,000 note.

The Reserve Bank of India (RBI) on May 19 said it was withdrawing the Rs 2,000 notes from circulation and gave citizens time until September 30 to exchange or deposit the currency notes.

Following the RBI’s decision to withdraw the said denomination, banks asked automated teller machine (ATM) operators to withdraw such notes from cash-dispensing machines.

According to senior ATM industry executives, only 3–5 per cent of the 260,000 machines, including white-label ATMs (WLAs), still have the Rs 2,000 denomination notes.

Banks and ATM operators disabled forthwith the release of Rs 2,000 notes from cash dispensers after RBI’s Friday circular. “There are ATMs that only dispense cash. There are also cash-recycling machines (CRMs) that accept cash,” said a senior executive of a firm that manages and deploys ATMs.

“What can be dispensed is monitored by a switch governed by banks. Banks have recalibrated those ATMs. Those machines will not dispense Rs 2,000 notes,” the executive said.

Similarly, WLA operators have also disabled the withdrawal of Rs 2,000 notes. There are 30,000-35,000 WLAs in the country. Significantly, the CRMs will continue to accept Rs 2,000 notes. Any customer who wishes to deposit cash of any denomination in those machines can continue to do so.

“We have to keep open CRMs for deposit, not for disbursement,” the executive said. In the aftermath of the RBI circular, banks reached out to ATM operators, asking them to take out the Rs 2,000 notes and return them to banks.

“There are a minuscule number of machines that still hold the Rs 2,000 denomination. Banks that have those notes have asked us to start emptying them from ATMs,” said a senior executive of a top ATM operator.

“We have conducted a quick team analysis. There are only 3–5 per cent ATMs that would have the Rs 2,000 denomination banknotes. It will take 48 hours (from Monday) to clean them out,” the executive added.

Cash logistics agencies have been asked by ATM operators to withdraw Rs 2,000 notes from machines and give them to banks.

The ATMs that would still have the Rs 2,000 denomination would be primarily in metro cities where cash withdrawals are very high.

ATM players also said most ATMs have been recalibrated in the past few years, and the cassette that used to hold the Rs 2,000 notes were replaced by one for a smaller denomination. This was because of a shortage of the note.

“The Rs 2,000 notes were not readily available. So why keep a cassette empty? We changed it to Rs 100, Rs 200, or Rs 500, whatever the bank told us to do so. This process started a few years ago,” the executive said.

The printing of Rs 2,000 banknotes was halted in 2018–19, the RBI said while announcing the withdrawal of the denomination. The share of the Rs 2,000 note, which was 37.3 per cent in terms of value in 2018, fell to 10.8 per cent by the end of 2022-23. 

The Rs 2,000 note was first introduced in November 2016 after the old Rs 500 and Rs 1,000 notes were declared invalid.

The Rs 2,000 note was issued primarily to meet the currency requirements of the economy in an expeditious manner.