Moneycontrol PRO

Nearly two-thirds of Indians don't hold a single Rs 2,000 note, survey finds

According to a survey by LocalCircles, 6 percent of respondents held more than Rs 1 lakh in the soon-to-be-withdrawn currency note

May 26, 2023 / 04:47 PM IST
The RBI has given the public until September 30 to either deposit or exchange the Rs 2,000 notes they hold with themselves.

The public has until September 30 to either deposit or exchange the Rs 2,000 notes they hold with themselves.

Nearly two-thirds of Indians don't hold a single Rs 2,000 currency note, according to a survey, seemingly confirming the Reserve Bank of India's (RBI) assertion that use of the high-denomination note was falling even before it announced that it would be withdrawing them from circulation.

The survey, conducted by community social media platform company LocalCircles, found that 64 percent of respondents had no Rs 2,000 note in their possession. However, 6 percent of respondents said they hold Rs 1 lakh or more in the form of these notes.

LocalCircles received 12,121 responses to this question. The responses showed 15 percent of those who answered the question have up to Rs 20,000 of the note, 7 percent have between Rs 20,000 and Rs 40,000, and 6 percent have between Rs 40,000 and Rs 1 lakh.

LocalCircles said its survey received over 57,000 responses from Indians in 341 districts of India. Sixty-four percent of the respondents were men and the remaining were women.

Late in the evening on May 19, the RBI announced that it will be withdrawing the Rs 2,000 banknote, and gave the public until September 30 to either exchange or deposit these notes they held at bank branches. Even though the central bank has said the Rs 2,000 note will remain legal tender, the decision has drawn comparisons with the government's demonetisation move of November 2016.

Amid speculation that last week's decision was taken to curb black money or may even have political motivations, Governor Shaktikanta Das has insisted that the action was a result of the RBI's currency management operations and that the high-denomination note had served its purpose.

"These Rs 2,000 notes were primarily issued for the purpose of quickly replenishing the value of money which was being taken out from the system when the then prevailing Rs 500 and Rs 1,000 notes, when their legal tender status was withdrawn… That purpose has been fulfilled," Das told reporters on May 22.

Reduced acceptance

Das had also commented that the Rs 2,000 note was not being actively used for transactions as some shopkeepers, particularly smaller ones, did not want to accept it due to its large denomination and lack of change.

In its survey, LocalCircles found that of those who have tried using the Rs 2,000 note to make a payment after the RBI's May 19 announcement, 91 percent found it difficult to get sellers to accept it.

"Many citizens with the Rs 2,000 note reveal difficulty in being able to use it at retail stores, chemists, hospitals, service providers and even petrol pumps since the RBI announcement," LocalCircles said.

"It appears that RBI's assurance of Rs 2,000 notes being a legal currency despite plans to withdraw it has increased fears about whether it would remain so after September 30 and fears of loss if it is not accepted as a legal currency," the firm added.

Some of the other findings of the survey were:

>> 64 percent of the respondents support the RBI's decision to withdraw the Rs 2,000 note from circulation, while 22 percent oppose the move. However, the question assumes the note will continue to be legal tender after September 30.

>> 68 percent of respondents believe that that the Rs 2,000 note remaining legal tender after September 30 "will enable those with black money to exploit the situation". A similar percentage of respondents do not want the exchange of the Rs 2,000 note to be permitted and only want their deposit to be allowed.

Moneycontrol News
first published: May 26, 2023 04:47 pm