Banks will be closely monitoring Jan Dhan Yojana (JDY)/ Basic Saving Bank Deposit (BSBD) accounts for any unusual deposits during the entire period -- May 23, 2023, to September-end 2023 -- when ₹2,000 banknotes will be withdrawn from circulation.

The vigil on JDY/BSBD accounts is in view of the possibility that these account holders could be used to receive and transfer fraudulent funds.

During the 2016 demonetisation of ₹500 and ₹1,000 denomination bank notes, a significant amount of these SBNs (specified bank notes) flowed into the following special types of accounts: Basic Saving Bank Deposit Account (BSBDA); PMJDY Accounts; Kisan Credit Card (KCC); dormant or inoperative accounts; co-operative banks’ accounts with Scheduled Commercial Banks; bullion trader/jewellers’ accounts; and loan accounts, according to a 2017 RBI report.

According to Mint Street Memo on “Demonetisation and Bank Deposit Growth”, put together by RBI officials Bhupal Singh and Indrajit Roy in 2017, before the discontinuation of over-the-counter exchange facility at bank branches on November 25, 2016, about ₹ 37,000 crore of SBNs were tendered.

₹2,000 deposit/exchange 

Public sector banks are expected to make the process of exchange/ deposit of ₹2,000 bank notes smooth for the public as they have been given three days to make suitable arrangements for the same, and the whole exercise of withdrawal of these notes will be spread over a longer period -- 130 days.

The finance ministry is understood to have told public sector banks to make the withdrawal process of ₹2,000 bank notes hassle-free. The public faced hardship during the 2016 demonetisation of ₹500 and ₹1,000 banknotes.

Bankers say, unlike in 2016, when they just had a day to prepare for implementing the demonetisation scheme and the window for exchange/ deposit of ₹500 and ₹1,000 bank notes was just 50 days, this time around, the public has 130 days to exchange/deposit the ₹2,000 banknotes.

So, there may not be any rush to exchange/deposit the notes at branches.

SBI modifies instructions

State Bank of India has partially modified its earlier instructions (issued on May 19) to exchange ₹2,000 banknotes. Per the Bank’s modified instructions (issued on May 20), the facility of exchange of ₹2,000 bank notes to all members of the public up to a limit of ₹20,000 at a time will be allowed without obtaining any requisition slip.

Further, no identity is required to be submitted by the tenderer at the time of exchange.

As per SBI’s earlier instructions, a person, who wants to exchange ₹2,000 banknotes, was required to show original identity proof -- one of the six officially valid documents (Aadhaar card, driving license, voter id card, passport, NREGA card and population register).

SBI has asked its local head offices to arrange accordingly and extend all cooperation to members of the public so that the exercise is conducted smoothly and seamlessly  without any inconvenience to the public.

All SBI branches have discontinued issuing ₹2,000 bank notes. ATMs/ Cash Recyclers will be re-configured accordingly.

Deposit of ₹2,000 banknotes into accounts maintained with SBI will be allowed in the usual manner -- without restrictions and subject to compliance with extant KYC norms and other applicable statutory requirements.

There will be no limit on the quantity and value of the ₹2,000 denomination bank notes to be credited into the account maintained with the Bank.

Branches have been asked to comply with cash transaction and suspicious transaction requirements, where applicable.

All bank branches will provide the facility of exchange of ₹2,000 banknotes to all members of the public up to a limit of ₹20,000 at a time.

For providing deposit/exchange facilities to people residing in remote/ unbanked areas, SBI’s circles may consider using mobile vans, if necessary.

Further, business correspondents may also be allowed to exchange ₹2,000 banknotes up to a limit of ₹4,000 per day for an account holder.