State Treasuries Overcome Hesitation, Now Accepting Rs 2,000 Notes as Deposits

State Treasuries Instructed to Accept Rs 2,000 Notes as Deposits, Exchanges Not Permitted

The finance department has issued a directive to state treasuries, rescinding their earlier reluctance, to accept Rs 2,000 denomination notes as deposits. This decision comes hours after officers were initially instructed not to receive the notes, which are currently being withdrawn from circulation. In order to address the ensuing confusion, a detailed circular will be issued by the department.

However, it is important to note that the exchange of Rs 2,000 notes will not be allowed at treasuries. The finance department has explicitly instructed that these particular banknotes should only be accepted as deposits.

Earlier on Monday morning, verbal instructions were given by the finance department officials, instructing them not to accept the banknotes that are being phased out of circulation.

In a separate development, the Kerala State Beverages Corporation Ltd (Bevco) has also directed all its outlets to immediately cease accepting Rs 2,000 currency notes.

The Reserve Bank of India (RBI) had announced on May 19 the withdrawal of Rs 2,000 currency notes from circulation, allowing the public until September 30 to either deposit these notes into their accounts or exchange them at banks.

RBI has stated that banks should cease issuing Rs 2,000 notes with immediate effect.

While the exact limit for depositing Rs 2,000 currency notes in bank accounts has not been specified by the RBI, individuals will be allowed to exchange a maximum of Rs 20,000 (equivalent to 10 notes of Rs 2,000) for other currency notes at any given time.

This decision comes amidst concerns about the potential hoarding of black money using the highest denomination notes. The printing of Rs 2,000 notes by the RBI had already been halted in the fiscal year 2018-19, and these notes were rarely seen in circulation.

The introduction of the Rs 2,000 denomination banknote in November 2016 was primarily aimed at promptly meeting the currency requirements of the economy following the withdrawal of the legal tender status of all Rs 500 and Rs 1,000 banknotes in circulation at that time.