Indians have 5 days to deposit $3 billion in soon-to-be-withdrawn banknotes

By Anup Roy

India’s highest value banknote will be withdrawn in less than a week — and there’s still almost Rs 24,000 crore ($2.9 billion) worth of the notes in circulation.
 

The Reserve Bank of India ordered the withdrawal of the Rs 2,000 note on May 19, giving people until the end of September to exchange or deposit them with banks. While the vast majority of the Rs 3.56 trillion have since been banked, 7 per cent of the notes remained in circulation as of Sep. 1.

The pink-hued Rs 2,000 note was introduced in November 2016 to remonetise the economy, after Prime Minister Narendra Modi’s shock decision to remove 1,000 and 500 rupee notes as legal tender overnight, as part of an anti-corruption push. It quickly became a favourite storage of value and the note of choice for large cash deals.

In its withdrawal notice, the RBI said the notes had served their purpose and were not commonly in use. It also cited its “clean note policy” to replace soiled notes within four to five years.

The May announcement led to a mini consumption boost for India’s economy, with local media reporting packed jewelry shops selling gold at a premium.

The notes will continue to remain legal tender even after September 30, but they will not be accepted for transaction purposes and can only be exchanged with the RBI. The holder will have to explain why the general deadline could not be met.