The RBI said it has also observed that Rs 2,000 denomination note is not commonly used for transactions.
On May 19, the Reserve Bank of India (RBI) had announced withdrawal of Rs 2,000 currency notes from circulation, and said existing notes in circulation can either be deposited in bank accounts or exchanged by September 30.
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The bank notes in Rs 2,000 denomination will continue to be a legal tender, the RBI said. Several banks including government and private banks have issued clarification regarding the exchange process of the currency notes. For customers, who are looking to deposit the money, instead of exchange, the procedure of banks regarding cash deposits will continue to apply.
Rs 2,000 note deposit in bank rules
The RBI has said that banks will follow their own process and rules in case of an exchange of Rs 2,000 notes.
However, it added that there is no limit on the amount of deposits that can be made in the bank account of a customer. The KYC norms will be applicable in case of deposits.
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It means the existing income tax requirement of furnishing PAN for deposits of Rs 50,000 or more in bank accounts will continue to apply for deposits of the withdrawn Rs 2,000 notes.
Moreover, RBI on Tuesday told the Delhi High Court that withdrawal of Rs 2,000 notes is not demonetisation but a statutory exercise, and the decision to enable their exchange was taken for operational convenience.
In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, the RBI has said exchange of Rs 2,000 bank notes into bank notes of other denominations can be made up to a limit of Rs 20,000 at a time at any bank starting from May 23.
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The Rs 2,000 denomination bank note was introduced in November 2016, primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of legal tender status of all Rs 500 and Rs 1,000 bank notes in circulation at that time.
The RBI said it has also observed that Rs 2,000 denomination note is not commonly used for transactions. Further, the stock of bank notes in other denominations continues to be adequate to meet the currency requirement of the public, it added.
