Small queues, confusion over rules at some as INR 2000 note exchange window opens

NEW DELHI — The 131-day window to exchange junked 2000 rupee currency notes opened on Tuesday with a mixed bag of small queues and confusion at some banks over the requirement of officially valid identity cards like PAN or Aadhaar, and official forms.

Unlike November 2016, when old 500 and 1000 rupee notes – constituting some 86 per cent of the currency in circulation – were banned overnight, INR 2000 currency notes continue to be legal tender for now, and the exchange window is more than double of that provided in 2016.

While the Reserve Bank of India (RBI) has not made the presentation of a valid ID or filling of deposit forms mandatory, there were complaints from some places that banks were demanding customers to submit identity cards as proof.

Some banks exchanged notes by making an electronic entry, few others asked customers to pen down their name and mobile number in a registrar without giving any identity proof.

At some places, however, customers said they were asked to present their PAN or Aadhaar cards. A small number of customers claimed the bank they visited did not exchange the notes and instead asked them to deposit those in their accounts.

While the queues and long waits witnessed in 2016 were not there, customer feedback indicated a lack of consistent policy across banks.

The RBI on Friday announced the withdrawal of INR 2000 denomination banknotes as part of its currency management. It has maintained that this wasn’t demonetization as the 2000 rupee notes continue to be legal tender, meaning they can be used for making payments.

The INR 2000 notes constitute around 10.8 per cent of total currency in circulation or INR 3.6 lakh crore. The notes can be exchanged or deposited till September 30, 2023.

Compared to demonetization, this time the quantum of currency being withdrawn is significantly smaller and the period to complete the process is more spread out.

During the November 2016 demonetization, 86 per cent of the currency in circulation was withdrawn with old 500 and 1000 notes ceasing to be legal tender. The entire process was completed over a shorter 50-day time period.

State Bank of India, the country’s biggest bank, in an official memo to its branches stated that no form or slip would be required while exchanging or depositing INR 2,000 notes.

Private banks like Kotak and HSBC said they are asking for form/ID Proof for non-account holders. But Axis Bank, Standard Chartered, Yes Bank, Canara Bank and Bank of India said they are not mandating any form or ID proof.

Bank of Baroda has said they don’t require any form but need ID proof for non-account holders. ICICI and HDFC have said they require all customers to fill out forms, but ID proof is needed only for non-account holders.

As per the RBI guidelines issued on Friday, the exchange of INR 2,000 facility is available from Tuesday. A person can exchange up to a limit of INR 20,000 at a time without filling out any form or requisition slip. Further, no identity proof is required to be submitted by the tenderer at the time of exchange.

No great rush was witnessed for exchange when branches opened. Outlets of private sector banks in metro cities in the early hours had business as usual.

According to a senior official of a public sector bank, not much rush is seen so far because there is a window of four months for exchange and currency in circulation to be exchanged is also relatively less compared to demonetization.

The official said, as far as the deposit in accounts are concerned, it is happening as usual and there is not much rush so far. Deposits are being accepted as per the extant guidelines.

RBI Governor Shaktikanta Das on Monday said there is enough time available for exchange and deposit in bank accounts, so people should not panic.

There is more than adequate quantity of printed notes available in the system not just with the RBI, but also at the currency chests which are operated by the banks, he said.

“So there is adequate stock available and there is no reason to worry whatsoever. We have more than sufficient stock,” he said.

The governor also said that the RBI is sensitive to the difficulties which may be faced by people who are on long foreign visits or living abroad on work visas.

“It will be our endeavour to address the difficulties of the people and to complete the entire process in a smooth manner,” he said.