Following the Indian government’s bold step to demonetize the old notes of 500 and 1000 INR, it was expected that the government and concerned authority must have some ready solution to tackle the cash chaos. But even after three weeks of the decision, the situation is still problematic as people still stand in queues and thronging from one ATM to another in search of liquid cash.
Some get succeeded to withdraw money from the machine while some don’t. Amidst the prevailing nationwide cash crunch, the RBI has introduced the new purple colored 2000 INR note on November 10 this year. But people find it extremely difficult to use it for transaction purposes.
Honestly speaking, unless the situation comes to normalcy it’s almost impossible to use the new note at one go. Obviously, the way people are running here and there to withdraw smaller denomination notes like the 100s, 50s, 10s from banks, certainly, there is no taker of Rs. 2000 INR notes now. Even if some of the people accept it they do so with a certain degree of restraint and reluctance.
The basic reason why people don’t want to take such notes of the big denomination is the wide gap in the value of notes of 500 and 2000. The common man might feel it is easier to transact four currency notes of new 500 notes than a single 2000 rupee note in the current chaotic economy. It will surely take time when people will start accepting such notes for their day-to-day transactions.
Why People Don’t Accepting the New 2000 INR Notes
- The current situation doesn’t let a person withdraw more than Rs. 2000/- per day from ATMs per card. They find it more convenient to withdraw money in 100 rupees notes than a single 2000 rupees note.
- Grocery and vegetable sellers carry their day to day business with very limited cash. It’s definitely impossible to imagine that a vegetable seller will exchange your Rs. 2000 note for a limited purchase worth Rs. 100 or 200.
- Many people won’t accept the new 2000 note for the single reason that it will be highly difficult for them to get the same exchanged when they need.
- The current psyche of the people is to hold as much cash as possible in hand. So they won’t take your Rs. 2000 note until the restriction limit on cash withdrawal is revoked.
- To meet our daily small transactions such as medicine bills, vegetable and fruit expenses and conveyance by way of rikshaw or bus, what we really need are the smaller notes of 100s, 50s and 10s and not the 2000 INR note.
- If more and more people get enlightened about the new digital payment systems such as e-wallets, paytm, Bank transfer, chque payment and NEFT, then sooner or later the quantum of cash transactions with denominations of 2000 and 500 will reduce to a large extent.
In order to instill faith of the people in transacting with the new 2000 rupees note, there is an urgent need for the government to enhance the supply of paper currency of smaller denominations such 500/100/50. Meanwhile, also people need to give away their habit of cash holding practice in smaller denominations or preference to hold cash for liquidity purposes.
However, people can still use the new 2000 notes where sizable expenditure is required such as the medical charges for surgery or to buy costly house appliances or IT products. Another way to use such notes is when you pay a big sum of money to your landlord as rent.