Moneycontrol

Rs 2,000 note withdrawal: Bankers gear up to handle crowds, top brass issues instructions

Rs 2,000 note withdrawal: Bankers gear up to handle crowds, top brass issues instructions

Banks have initiated the preparations to accept notes in the Rs 2,000 denomination from May 23 after the Reserve Bank of India (RBI) on Friday announced the withdrawal of these bills from circulation. Moneycontrol has reviewed the instructions sent by the top management of at least five state-run banks, which asks branches to make sure the process is smooth. The country's largest public sector bank by assets, the State Bank of India (SBI), on May 22 informed all its branches that no form or identity proof should be asked for from customers to exchange Rs 2,000 currency notes, even as it underlined the one-time limit of Rs 20,000 for depositing or exchanging the banknote. Appropriate infrastructure On May 19, the RBI announced plans to withdraw Rs 2,000 notes from circulation and later on May 22 asked banks to keep the infrastructure prepared for the process of accepting and/or exchanging the notes. The RBI has given time till September 30 for the public to exchange or deposit the currency notes in banks or dedicated RBI offices. "Banks are advised to provide appropriate infrastructure at the branches such as shaded waiting space, drinking water facilities, etc. considering the summer season," said the RBI's circular on Monday. Other major banks have stepped up measures in order to provide a smooth experience. "Branches may establish additional counters for effective management and to avoid law & order situation," said Bank of Baroda circular to branch managers which Moneycontrol has reviewed. Mobile service However, the Punjab National Bank (PNB) circular, which Moneycontrol reviewed, mentioned that there shall not be any limit on the quantity and value of the Rs 2,000 denomination notes to be credited into the account maintained with the bank. "For providing deposit / exchange facility to people residing in remote/ unbanked areas, Circles may consider using mobile vans, if necessary," said the PNB circular. The PNB circular added that all banknotes in this denomination received by its branches shall be sorted immediately through Note Sorting Machines (NSMs) for accuracy and genuineness and deposited in the currency chests under the Linkage Scheme or kept ready for dispatch to the nearest Issue Office of the RBI. "Branches shall to the extent feasible make special arrangements to reduce inconvenience to senior citizens, persons with disabilities, and women seeking to exchange/ deposit of Rs 2,000 notes," said the Indian Overseas Bank circular to branch managers, which Moneycontrol has reviewed. In a circular seen by Moneycontrol, the UCO Bank management said the deposited Rs 2,000 notes would be secured in separate boxes or bins and sealed at the end of the day. "A register will also be maintained on deposits every day, which will be signed by BH (branch head) and ABH (assistant branch head) or both," the circular said. The bin or the box would be sealed when full and the branch would liaise with the "regional RBI office to lift soiled notes and Rs 2,000 currency to create space by respective CCS (cross currency swap) ". "All moves of Rs 2,000 currency will be reported separately henceforth, whether it is from branch to (currency chest) CC or CC to RBI," the order added. Bankers don’t expect the large crowds seen during the demonetisation exercise of 2016, when banknotes in the Rs 1,000 and Rs 500 denomination were rendered invalid (these were replaced by the Rs 2,000 note and a new Rs 500 note), pulling out 86 percent of the currency in circulation, according to some estimate. Unlike the four-hour notice on that occasion, citizens have time till September 30 to deposit or exchange these high denominations notes. Also read: Rs 2,000 note withdrawal: Crowds unlikely, people have enough time, say bankers Bankers start getting calls to exchange notes  A public sector bank’s branch manager told Moneycontrol on condition of anonymity that they have started getting calls from some customers requesting anonymity in transactions. "I got a call from a local powerful person, who has some huge amount of Rs 2,000 notes. The person requested me to give some favours, but I refused, saying nothing can be done," the person said. The banker added that there's not much worry among common people since they have hardly any such notes. "Common people are only calling that we have one or two notes of Rs 2,000, and we are getting general queries. So we are also not expecting much crowds this time," said the branch manager. Low circulation Enough time to exchange the notes and their low circulation (the central bank had ceased printing the notes in 2020) would not burden the banks, bankers and analysts Moneycontrol spoke to after the RBI’s May 19 decision said. The total value of Rs 2,000 notes in circulation has declined to 10.8 percent of the total as on March 31, 2023, according to the data shared by the RBI. About 89 percent of the Rs 2,000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life span of four to five years, the RBI said on May 19. The total value of these banknotes in circulation has declined from Rs 6.73 lakh crore at its peak on March 31, 2018, (37.3 percent of notes in circulation) to Rs 3.62 lakh crore, constituting only 10.8 percent of notes in circulation on March 31, 2023, the central bank said. The central bank said this denomination is not commonly used for transactions. "Further, the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public," it added.