RBI withdraws Rs 2,000 notes from circulation, asks all to exchange or deposit them by Sept 30
The Reserve Bank of India has decided to withdraw Rs 2,000 denomination banknotes from circulation and asked all to exchange or deposit them by September 30,2023.
In a statement released on Friday, the central bank stated: “In pursuance of the “Clean Note Policy” of the Reserve Bank of India, it has been decided to withdraw the ₹2000 denomination banknotes from circulation. The banknotes in ₹2000 denomination will continue to be legal tender. To complete the exercise in a time-bound manner and to provide adequate time to the members of public, all banks shall provide deposit and/or exchange facility for ₹2000 banknotes until September 30, 2023.”
Explaining the move, the RBI said: “About 89% of the ₹2000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life-span of 4-5 years. The total value of these banknotes in circulation has declined from ₹6.73 lakh crore at its peak as on March 31, 2018 (37.3% of Notes in Circulation) to ₹3.62 lakh crore constituting only 10.8% of Notes in Circulation on March 31, 2023. It has also been observed that this denomination is not commonly used for transactions. Further, the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public.”
RBI said members of the public may deposit Rs 2,000 banknotes into their bank accounts or exchange them into banknotes of other denominations at any bank branch. “Deposit into bank accounts can be made in the usual manner, that is, without restrictions and subject to extant instructions and other applicable statutory provisions,” it said.
The central bank added, “In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of Rs 2000 banknotes into banknotes of other denominations can be made upto a limit of ₹20,000/- at a time at any bank starting from May 23, 2023.” Additionally, the facility for exchange of Rs 2,000 bank notes up to the limit of Rs 20,000 at a time will be provided at the 19 Regional Offices of the RBI having issue departments from May 23.
The Rs 2,000 denomination currency note was introduced in November 2016 following the demonetisation of Rs 1,000 and the old Rs 500 banknotes. According to the RBI, the objective of introducing the Rs 2,000 banknotes was met once currency in other denominations became available in adequate quantities. As such, printing of the Rs 2,000 banknotes was already stopped in 2018-19.