RBI Likely to Extend Deadline for Returning Rs. 2,000 Banknotes

The Reserve Bank of India (RBI) is likely to extend the deadline for depositing or exchanging Rs. 2,000 bank notes. The current deadline is September 30, 2023, but according to a report by Moneycontrol, the new deadline may be extended to October 31, 2023.

“It looks like the RBI will extend the date for deposit and exchange of Rs 2,000 notes by at least a month because it has to factor in the non-resident Indians as well as others living overseas,” Moneycontrol quoted an official as saying.

Chandan Sinha, a former executive director of the RBI, said that the central bank may extend the deadline to make the withdrawal process hassle-free. “My sense is that the RBI will extend the deadline because the objective was withdrawal in a non-disruptive manner,” Sinha said.

However, some top bankers said that the RBI wants 100% of the Rs. 2,000 notes to be returned from the system.

“The RBI may probably come out with a special dispensation for people who have missed the time window. Some people were abroad, some were not well, and so on. They may be given special dispensation to exchange the notes,” a senior official from South Indian Bank said, as per the report.

“Perhaps the RBI may offer a window to those who were abroad all these months,” said former deputy governor R. Gandhi.

As of August 31, 2023, 93% of the Rs. 2,000 banknotes that were withdrawn by the RBI on May 19, 2023, have been returned to the banking system. This is equivalent to Rs. 3.32 lakh crore. Last week, the RBI had issued a directive asking the public to exchange or deposit Rs. 2,000 banknotes.

According to the RBI, individuals can make transactions with Rs. 2,000 banknotes even after the deadline, as the notes would continue as legal tender. However, the central bank has advised people to exchange the notes as many businesses may stop accepting them. Amazon has already ceased accepting Rs. 2,000 banknotes.