Twitter abuzz as ₹2,000 notes face rejection by traders, emphasis on e-payments
2 min read . Updated: 22 May 2023, 10:05 AM IST
PremiumDespite the RBI's clarification that the ₹2,000 denomination note remains a legal tender, citizens in the city are facing difficulties as various establishments
The Reserve Bank of India has decided to withdraw ₹2,000 bank notes from circulation, even as it remains legal tender. With over four months remaining before the ₹2,000 denomination notes are deemed invalid, a significant number of shops, vendors, trading units, and service providers are declining to accept them.
Twitter users express frustration as vendors refuse to accept ₹2,000 denomination notes. Despite the RBI's clarification that the ₹2,000 denomination note remains a legal tender, citizens in the city are facing difficulties as various establishments, including hospitals, pharmacies, petrol pumps, and vendors, refuse to accept the note.
Md Ibrahim, a Hyderabad resident, took to Twitter to recount his encounter where the staff and manager of an Indian Oil petrol pump declined to accept the ₹2,000 note, despite the RBI's extension of acceptance until September 30.
A Twitter user named Vivek Das expressed his frustration by stating that even hospitals are refusing to accept ₹2,000 notes. He mentioned that hospital bills are already substantial, and the non-acceptance of these notes has compelled him to pay in denominations of ₹500.
Riju Verma, another Twitter user, shares a similar experience of non-acceptance of ₹2,000 notes “Indian Oil, your dealer at Ayyapa Society Road refused to accept 2,000 notes."
People holding ₹2,000 notes have until 30 September to deposit or exchange the notes. The banknotes can be exchanged for up to ₹20,000 at a time at any bank starting from 23 May 2023. The facility for exchange will also be available at the 19 regional offices of RBI having issue departments. RBI has also asked banks to stop issuing ₹2,000 notes “with immediate effect".
Earlier, senior Congress leader Kapil Sibal expressed disagreement with the Centre's decision to phase out ₹2,000 notes.
RBI’s decision bears some similarities to the 2016 demonetization event, where the central bank invalidated ₹500 and ₹1,000 banknotes, resulting in widespread chaos. However, in contrast to the significant cash removal during the previous measure, the impact of ₹2,000 notes is likely limited as it constitutes only a fraction of the currency in circulation.
With the notes being exchanged, deposit accretion at banks could increase, reducing pressure to hike deposit rates, which in turn could also moderate the rise in short-term loan rates.
Mint reported on 25 July 2017 that RBI had stopped printing these notes and stepped-up printing of the new ₹200 notes. The printing of these ₹2,000 notes was stopped after the notes in other denominations were available in adequate quantities.
However, it was also seen that the circulation of ₹2,000 notes had drastically come down over the years, with even bank ATMs rarely disbursing these notes. According to RBI, the ₹2,000 notes currently constitute only 10.8% of the notes in circulation, amounting to ₹3.62 trillion as against 37.3%, amounting to ₹6.73 lakh as on 31 March 2018.