Banks have been struggling with a strange problem. Reportedly, they are unable to exchange the notes of Rs 200 and Rs 2000 as guidelines governing the two denomination notes have not been a part of Section 28 of the Reserve Bank of India (RBI) Act. The problem has arisen because the size of Mahatma Gandhi has been changed in new series thus requiring the amendment to the Act.
The section 28 of the RBI Act does not include details about Rs 200 and Rs 2000, as they have been introduced after demonetisation. The Act, currently, specifies notes of the denomination of Rs 5, Rs 10, Rs 50, Rs 100, Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000. The banking regulator needs to soon amend the law, as it could turn out into a bigger problem. As reported RBI reached out to the finance minister in 2017 but so far no action has been taken up by the government.
The Rs 2000 note got launched on November 8, 2016 after high-value notes of Rs 500 and Rs, 1,000 were withdrawn by the government. The RBI launched the Rs 200 note last year on August 25, 2017, to deal with the liquidity issue.
There was an acute shortage of cash in ATMs till sometime back. Madhya Pradesh Finance Minister Jayant Kumar Malaiya said that the cash crunch has happened due to shortage Rs 2000 in circulation.
He told ANI.”This situation (cash crunch) is not restricted to the state, it is there in the entire country. It is true that the notes of Rs.2000, which amounts to a currency of Rs. 7 lakh crore have gone out of supply, thus leading to such a situation,”