We anticipate that the market will experience a significant bullish trend as a result of the expected withdrawal of approximately 3.5 trillion rupees from circulation and its return to the banking system. This move is likely to exert instant control over inflation and lead to an increase in tax collection during the quarter. From a strategic perspective, this measure is expected to effectively address multiple issues in a single stroke. Following Banking & Financial services schemes seems to be the top gainers :
What happened to Rs 2000 note ?
The Reserve Bank of India has decided to withdraw Rs 2,000 denomination banknotes from circulation and asked all to exchange them by September 30,2023
Here are the key points regarding the withdrawal of Rs. 2,000 denomination banknotes in India:
1. The Reserve Bank of India (RBI) has decided to withdraw the Rs. 2,000 banknotes from circulation.
2. The Rs. 2,000 banknotes will continue to be legal tender, even though they will no longer be in circulation.
3. The deadline for exchanging or depositing Rs. 2,000 banknotes is September 30, 2023.
4. Banks are directed to provide deposit and exchange facilities for these banknotes until the deadline.
5. The RBI's decision is part of its 'Clean Note Policy' and is based on the fact that a large percentage of the Rs. 2,000 banknotes in circulation were issued prior to March 2017 and are reaching the end of their estimated lifespan of 4-5 years.
6. The usage of Rs. 2,000 banknotes for transactions is not common, and the stock of banknotes in other denominations is deemed sufficient to meet the currency requirements of the public.
7. Individuals can deposit the Rs. 2,000 banknotes into their bank accounts or exchange them for banknotes of other denominations at any bank branch.
8. There are no specific restrictions on depositing the banknotes into bank accounts.
9. Starting from May 23, 2023, individuals can exchange Rs. 2,000 banknotes for banknotes of other denominations up to a limit of Rs. 20,000 at a time at any bank branch. One can deposit any amount in their Bank wherein taxation will be applicable as per law
10. The facility for exchanging Rs. 2,000 banknotes up to the limit of Rs. 20,000 at a time will also be available at the 19 Regional Offices of the RBI from May 23.
11. The RBI had previously stopped printing Rs. 2,000 banknotes in 2018-19 as the requirement for smaller denomination notes was met.
12. As of March 31, 2023, there are approximately 181 crore Rs. 2,000 banknotes in circulation, with a total value of Rs. 3.62 lakh crore, constituting about 10.8% of Indian currency notes in circulation.
13. It is not explicitly mentioned whether the Rs. 2,000 banknotes will continue to be legal tender after September 30, 2023. Further clarification from the RBI is expected on this matter.
14. In the past, the RBI had withdrawn all banknotes issued prior to 2005 from circulation in 2014. The older notes continued to be legal tender, and the public was advised to exchange them or deposit them at banks after April 1, 2014.
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