MONEY exchanges in Bahrain are reporting a rush of Indian customers wanting to trade 2,000-rupee notes which India has decided to withdraw from circulation.

The central Reserve Bank of India on Friday asked people to deposit the banknotes and exchange them for small denominations before September 30 this year.

Banks in India have also been advised to stop issuing the 2,000-rupee notes, as part of a ‘Clean Note Policy’ to ensure the availability of good quality banknotes. The banknote was introduced in 2016 after the Narendra Modi-led government abruptly withdrew 500 and 1,000-rupee notes to clamp down on forgeries.

The government later began issuing new 500-rupee notes and added the 2,000-rupee notes to replenish currency at a faster pace.

However, no official guidelines have been issued for Non-Resident Indians, many of whom were caught unaware – and there has been no response from the Indian Embassy which GDN approached for a clarification.

“Several customers have visited our branches to exchange the 2,000-rupee notes for Bahraini dinars,” said a Bahrain Financing Company (BFC) spokesman yesterday.

“We currently do not exchange these banknotes because we have our own stock that needs to be cleared.”

The spokesman added that due to the rupee plummeting, several Indian families cashed in by converting dinars into rupees ahead of the summer holiday.

“There are lots of people who have Rs50,000 (BD227) or even Rs150,000 (BD680) in 2,000-rupee notes,” said the spokesman, adding that no exchange house in Bahrain was accepting the 2,000-rupee notes.

“We assure our customers who receive the 2,000-rupee notes from us that they are still legal tender, and if they face any issues they can visit our branch to exchange them.”

Zenj Exchange, too, reported a rush of customers inquiring or trying to exchange the 2,000-rupee notes.

“We have received several queries on the subject and are currently not accepting or exchanging the 2,000-rupee notes, following instructions from the RBI,” said general manager Suresh A K. “We have a limited stock of the notes which we plan to send to an agent or correspondent bank.”

The RBI has said that about 89 per cent of the 2,000-rupee notes were issued prior to March 2017 and are at the end of their estimated life span of 4-5 years.

The value of the banknotes in circulation is 3.62 trillion Indian rupees ($44.27 billion), about 10.8pc of the currency in circulation.

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