May 19th, New Delhi
The Reserve Bank of India announced the withdrawal of Rs 2,000 currency notes from circulation on Friday, and existing notes in circulation can be deposited or exchanged by September 30.
However, the banknotes in the denomination of Rs 2,000 will remain legal tender, according to the RBI.
To ensure operational convenience and to avoid disruption of regular bank branch activities, the RBI announced that beginning May 23, 2023, exchanges of Rs 2,000 bank notes into bank-notes of other denominations can be made up to a limit of Rs 20,000 at a time at any bank.
The Reserve Bank of India has advised banks to stop issuing Rs 2,000 banknotes immediately.
Furthermore, beginning May 23, the RBI's 19 Regional Offices (ROs) with issue departments will offer the ability to exchange Rs 2,000 bank notes up to a limit of Rs 20,000 at a time.
The Rs 2,000 denomination bank-note was introduced in November 2016, primarily to meet the economy's currency requirements in a timely manner following the withdrawal of legal tender status of all Rs 500 and Rs 1,000 banknotes in circulation at the time.
“The Rs 2000 denomination banknote was introduced in November 2016 under Section 24(1) of the RBI Act, 1934, primarily to meet the currency requirement of the economy in an expeditious manner following the withdrawal of the legal tender status of all Rs 500 and Rs 1000 banknotes in circulation at that time,” the RBI said in a statement. When banknotes in other denominations became available in sufficient quantities, the goal of introducing Rs 2000 was met. As a result, the printing of Rs 2000 banknotes was halted in 2018-19.”
“In accordance with the Reserve Bank of India's ‘Clean Note Policy,' it has been decided to withdraw the Rs 2000 denomination banknotes from circulation.” “Banknotes in the denomination of Rs 2000 will remain legal tender,” the statement said.
When banknotes in other denominations became available in sufficient quantities, the goal of introducing Rs 2000 was met. As a result, the printing of Rs 2000 banknotes was halted in 2018-19.
Approximately 89% of Rs 2000 banknotes were issued prior to March 2017 and have reached the end of their estimated life span of 4-5 years. The total value of these banknotes in circulation has decreased from Rs 6.73 lakh crore on March 31, 2018 (37.3 per cent of Notes in Circulation) to Rs 3.62 lakh crore on March 31, 2023 (10.8% of Notes in Circulation). This denomination is also not commonly used for transactions, according to observations. Furthermore, the stock of banknotes in other denominations remains sufficient to meet the public's currency needs.
It should be noted that the RBI took a similar step to withdraw notes from circulation in 2013-2014.
As a result, citizens can deposit Rs 2000 banknotes into their bank accounts and/or exchange them for banknotes of other denominations at any bank branch. Deposits into bank accounts can be made in the usual way, without restrictions and in accordance with existing instructions and other applicable statutory provisions.
The central bank stated that in order to complete the exercise on time and give the public enough time, all banks must provide deposit and/or exchange facilities for Rs 2000 banknotes until September 30, 2023. Banks have also received separate guidelines.
