The Reserve Bank of India (RBI) took a big decision last week and again brought back the memories of demonetisation. The Central Bank said on Friday that Rs 2,000 note is being taken out of circulation (Rs 2000 Withdrawal). Various reactions were received from all the sections of the society on this decision. Many people say that this decision will boost the economy, while many people are calling it as fatal as demonetisation. Meanwhile, a question is arising in the minds of those interested in the market that how this decision can affect the market in the coming days.
Central Bank told this thing
First of all, some talk about the latest decision of the Reserve Bank. Announcing the withdrawal of Rs 2000 notes from circulation, the Reserve Bank said that they can be exchanged in banks from May 23. According to the Central Bank, as on March 31, 2018, the circulation of Rs 2000 notes was equal to Rs 6.73 lakh crore, which has come down to Rs 3.62 lakh crore as on March 31, 2023. These notes are just 10.8 percent of all notes in circulation.
Not getting accepted in the market
The Reserve Bank says that these notes have not been discontinued with immediate effect. People can still use these notes for transactions. However, the Reserve Bank has advised people to go to the bank to exchange 2000 rupee notes by 30 September 2023. A person can exchange 10 notes of 2000 rupees i.e. up to 20 thousand rupees at a time. However, after this announcement of the Reserve Bank, people are complaining that the 2000 rupee notes have already been refused in the market.
there will be no big effect
As far as the impact of this decision on the stock market is concerned, market experts say that there will hardly be any major impact of this decision. Market experts believe that the effect of demonetisation, which was seen in 2016, is not going to be the same this time. Common people already had very few 2000 rupee notes. On the other hand, UPI is being used extensively across the country. In such a situation, there is not going to be any effect on the consumption of the people, as was seen in the form of a sudden terrible decline in the sale of essential things after demonetisation.
Icra’s Senior Vice President Financial Sector Ratings Karthik Srinivasan says, as was seen at the time of demonetisation, we expect this to increase deposits with banks. Due to this, the deposits of banks can improve in the near future. This will reduce the pressure of deposit rate hike and may lead to softening of short term interest rates in the days to come. If this estimate proves correct, then banking shares can perform well in the coming days.
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