The Reserve Bank of India (RBI) has decided to withdraw Rs 2,000 currency notes from circulation. However, the bank notes will continue to be legal tender, RBI said in a statement on Monday
The Rs 2,000 denomination banknote was introduced in November 2016, primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of legal tender status of all Rs 500 and Rs 1,000 banknotes in circulation at that time
The objective of introducing Rs 2,000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, printing of Rs 2,000 banknotes was stopped in 2018-19, RBI said
As per the RBI release, about 89% of the Rs 2,000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated lifespan of 4-5 years
The total value of Rs 2,000 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
RBI also observed that Rs 2,000 denomination note 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
In view of the declining circulation and use of Rs 2,000 bank notes, and in pursuance of the “Clean Note Policy” of the Reserve Bank of India, the central bank has decided to withdraw the Rs 2,000 denomination banknotes from circulation
The Reserve Bank of India has advised banks to stop issuing Rs 2,000 denomination banknotes with immediate effect
As per the RBI documents, the banknotes in Rs 2,000 denomination will continue to be legal tender, meaning this withdrawal is not like demonetisation, where Rs 1,000 and Rs 500 denomination notes were removed from legal tender and could not be used. In case of Rs 2,000 denomination notes withdrawal, those carrying the currency can still use them
RBI stated that people 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 without any restrictions and subject to extant instructions and other applicable statutory provisions," RBI said
In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of Rs 2,000 banknotes into banknotes of other denominations can be made up to a limit of Rs 20,000 at a time at any bank starting from Tuesday, May 23, 2023, RBI added
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 Rs 2,000 banknotes until September 30, 2023. Separate guidelines have been issued to the banks, RBI said
According to RBI, the facility for exchange of Rs 2,000 banknotes, up to the limit of Rs 20,000 at a time, shall also be provided at the 19 Regional Offices (ROs) of RBI having Issue Departments from May 23, 2023
In its statement, RBI advised people to deposit or exchange their Rs 2,000 banknotes by September 30, 2023. A document on Frequently Asked Questions (FAQs) in the matter has also been hosted on the RBI website for information and convenience of the public