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

The 131-day window to exchange 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, Rs 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 register without giving any identity proof.

The bank has decided not to seek any identity proof for Rs 2,000 note exchange and the exercise has been smooth on the first day, Bank of Maharashtra executive director Asheesh Pandey said.

Besides, he said, the bank has asked its field functionaries to give preference to the elderly, physically handicapped and women.

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

Suresh Sonthalia Confederation Of All India Traders National Secretary said many branches in Jamshedpur are exchanging only after submission of proof of identity.

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

Exchange process was smooth and took just a few minutes at the counter, a senior bank official said.

Even the regional offices of the Reserve Bank did not see huge rush for exchange currency notes. For example, Delhi regional office of Reserve Bank had made arrangement for water and sitting area anticipating long queues but not many people turned up for exchange.

The RBI on Friday announced the withdrawal of Rs 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 Rs 2000 notes constitute around 10.8 per cent of total currency in circulation or Rs 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 that no form or identity proof would be required while exchanging or depositing Rs 2,000 notes.

There were reports that initially some branches insisted on filling of a form but later discontinued the practice after receiving instructions from their head office. 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 Rs 2,000 facility is available from Tuesday. A person can exchange up to a limit of Rs 20,000 at a time.

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.

Canara Bank Officers Association (CBOA) general secretary Ravi Kumar K said the bank and its staff are ready to serve the general public in the exchange process of 2,000 denomination notes in a smooth manner.

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.