The Reserve Bank on Saturday extended the special drive to withdraw Rs 2,000 bank notes from the system by another week, till October 7.

The central bank said ever since it announced the move to withdraw Rs 2,000 notes on May 19, Rs 3.42 lakh crore of such notes have been received into the system either by deposition into bank accounts or exchanging, from the public.

The currency returned is 96 per cent of the Rs 2,000 bank notes in circulation as on May 19, the Reserve Bank said in a statement, adding only Rs 14,000 crore of such notes are in circulation now.

Earlier, the deadline to deposit/exchange Rs 2,000 notes was September 30, 2023.

“…it has been decided to extend the current arrangement for deposit/exchange of Rs 2,000 banknotes until October 07, 2023,” the central bank said in a statement.

In a surprise move, it had announced withdrawal of Rs 2,000 notes in May, but maintained that it was not akin to the demonetisation carried out in November 2016 when Rs 500 and Rs 1,000 notes were made illegal tender overnight.

In May 2023, RBI said the higher denomination notes were introduced for a faster remonetisation of the economy and the move had served its purpose. Since it had stopped printing the notes from FY19, there were also concerns surrounding the quality of the notes in circulation.

The Rs 2,000 note withdrawal move had some unseen impacts like helping banks report a higher deposit growth, a challenging aspect for the system for some time.

In the statement on Saturday, RBI said the Rs 2,000 notes “shall continue to be legal tender” even beyond October 7, but asked the public to deposit or exchange the notes “without any further delay”.

From October 8, the deposit/exchange facilities at bank branches will be stopped, and people will have to get them exchanged at 19 offices of RBI, the statement said.

For exchange of the notes, a cap of Rs 20,000 per transaction has been imposed while there is none for the notes which are tendered at the RBI offices for crediting into bank accounts.

People within the country can also send Rs 2,000 notes through India Post, addressed to any of the 19 RBI Issue Offices for credit to their bank accounts in India, the statement said, specifying that such a transaction will be subject to regulation of the government and submission of documents.

RBI also said that courts, law enforcement agencies, government departments or any other public authority involved in investigation proceedings or enforcement can also deposit/exchange Rs 2,000 notes at any of the RBI offices without any limit.

“The facility for deposit/exchange of Rs 2,000 banknotes at the 19 RBI Issue Offices shall be available until further advice,” RBI said.