Rs 2,000 notes recalled: What will happen to your notes? RBI issues FAQs

The Reserve Bank of India on Friday said it will withdraw Rs 2,000 notes from circulation and people can exchange or deposit the currency notes in their bank accounts by September 30, 2023. The exchange facility for Rs 2,000 currency notes will start from May 23, 2023, the RBI said. 

The central bank has said that the existing Rs 2,000 denomination banknotes will continue to be legal tender. 

RBI said it has asked banks to stop issuing Rs 2,000 notes with immediate effect. It added that its 19 regional offices and other banks will start taking Rs 2,000 notes for exchange with lower denomination one.  

Explaining its move, RBI said: “Banknotes in other denominations are available in adequate quantities.” 

"Members of the public can continue to use Rs 2,000 banknotes for their transactions and also receive them in payment. However, they are encouraged to deposit and/or exchange these notes on or before September 30, 2023," said RBI. 

"In pursuance of the 'Clean Note Policy' of the Reserve Bank of India, it has been decided to withdraw the Rs 2,000 denomination bank notes from circulation," the RBI said. 

Here are a few FAQs RBI answered: 

1.    Does the legal tender status of Rs 2000 banknotes remain? 

Yes. The Rs 2000 banknote will continue to maintain its legal tender status, as per RBI. 

2.    Can Rs 2000 banknotes be used for normal transactions? 

Yes. Members of the public can continue to use Rs 2000 banknotes for their transactions and also receive them in payment.  

However, they are encouraged to deposit and/or exchange these banknotes on or before September 30, 2023. 

3.    What should the public do with the Rs 2000 denomination banknotes held by them? 

Members of the public may approach bank branches for deposit and/or exchange of Rs 2000 banknotes held by them. 

4.    When is the last date for the exchange? 

People are encouraged to deposit and/or exchange these banknotes on or before September 30, 2023. 

5.    Is there a limit on deposit of Rs 2000 banknotes into a bank account? 

Deposit into bank accounts can be made without restrictions subject to compliance with extant Know Your Customer (KYC) norms and other applicable statutory / regulatory requirements. 

6.    Is there an operational limit on the amount of Rs 2000 banknotes that can be exchanged? 

Members of the public can exchange Rs 2000 banknotes up to a limit of Rs 20,000/- at a time. 

7.    Can Rs 2000 banknotes be exchanged through Business Correspondents (BCs)? 

Yes, the exchange of Rs 2000 banknotes can be made through Business Correspondents but up to a limit of Rs 4000/- per day for an account holder. 

8.    Can a customer exchange the notes at any bank or he has to be an account holder of the bank to exchange Rs 2000 banknotes? 

9.    No. Anyone, even a non-account holder can exchange Rs 2000 banknotes up to a limit of Rs 20,000/- at a time at any bank branch. 

10.                       Is there any fee to be paid for the exchange facility? 

No. The exchange facility shall be provided free of cost. 

11.                       Will there be special arrangements for senior citizens, persons with disabilities, etc. for exchange and deposit? 

12.                       Banks have been asked to make arrangements to reduce inconvenience to senior citizens, persons with disabilities, etc., who are keen to exchange or deposit Rs 2000 banknotes. 

13.                       Why are Rs 2000 denomination banknotes being withdrawn? 

The Rs 2000 denomination banknote was introduced in November 2016 primarily with the objective to meet the currency requirement of the economy in an expeditious manner after the withdrawal of the legal tender status of all Rs 500 and Rs 1000 banknotes in circulation at that time, the central bank said.

"About 89% of the Rs 2,000 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 Rs 6.73 lakh crore at its peak as on March 31, 2018 (37.3% of notes in circulation) to Rs 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 in a statement.

In view of the above, and in pursuance of the “Clean Note Policy” of the Reserve Bank of India, it has been decided to withdraw the Rs 2000 denomination banknotes from circulation, it added. 

Also read: Why RBI decided to withdraw the high denomination Rs 2,000 note from circulation

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Watch: Rs 2,000 denomination banknotes withdrawn, will continue as legal tender; What happens to your notes? Know RBI’s advisory on exchange, deposit of Rs 2,000 notes