Q. The Reserve Bank of India (RBI) has decided to withdraw ₹2,000 notes from circulation. In this context, consider the following statements:
1.The withdrawal will create huge disruption in the economic activities.
2.It will decrease banks’ deposit base and liquidity in the money markets..
3.No requisition form and identity proof are required to exchange Rs 2,000 notes..
Which of the statements given above is/are correct?

[A] 1 and 2 only

[B] 2 only

[C] 2 and 3 only

[D] 3 only

Answer: D
Notes:

Explanation –

Statements 1 and 2 are incorrect. This withdrawal will not create any big disruption as the increased adoption of digital transactions and the availability of 100- and 500-rupee denominations will help minimize disruptions. This decision could boost banks’ deposit base and liquidity in the money markets by anywhere between ₹40,000 crore to ₹1.1 lakh crore, even if just about a third of 2000 rupees notes are flushed out by the exercise.

Statement 3 is correct. State Bank of India (SBI) has clarified that no requisition form and identity proof are required to exchange Rs 2,000 notes. This means any member of the public can exchange Rs 2,000 notes across the counter in any branch without any identity proof or slip.

Source: ForumIAS

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