RBI to withdraw Rs. 2,000 currency note from circulation
The Reserve Bank of India (RBI) has instructed banks to cease issuing Rs. 2,000 denomination banknotes with immediate effect. It, however, stated that the banknotes in the Rs. 2,000 denomination will continue to be legal tender. In a press statement, RBI Chief General Manager Yogesh Dayal announced that the public is encouraged to deposit or exchange the notes until September 30, 2023.
Here is the press statement by RBI
RBI on why it is withdrawing Rs. 2,000 currency note
Explaining the rationale behind the move, the RBI stated that the Rs. 2,000 banknote was introduced in November 2016 to meet the currency requirements of the economy following the withdrawal of the legal tender status of all Rs. 500 and Rs. 1,000 banknotes. It added that the objective was achieved when sufficient quantities of banknotes of other denominations were made available.
89% of Rs. 2,000 denomination banknotes issued before March 2017
"About 89% of Rs. 2,000 denomination banknotes were issued prior to March 2017...The total value of these banknotes in circulation has declined from Rs. 6.73 lakh crore at its peak as of March 31, 2018 (37.3% of Notes in Circulation) to ₹3.62 lakh crore...on March 31, 2023," it said. The bank also noted that the Rs. 2,000 denomination is not typically utilized for transactions.
Notes withdrawn in pursuance of 'Clean Note Policy'
Among other reasons, the RBI further explained that it decided to withdraw the Rs. 2000 denomination banknotes from circulation in pursuance of the "Clean Note Policy." The policy is one that the RBI has implemented to ensure that members of the public have access to good-quality banknotes.
Can Rs. 2,000 notes still be used for normal transactions
The general population can continue to use Rs. 2,000 banknotes for transactions and as payment. All deposits and exchanges, however, must be completed by September 30. The public may approach bank branches for deposits or exchanges. The facility for such will be available at all banks before the given date. They can exchange up to a limit of Rs. 20,000 at a time.
Date for exchange to be available from May 23
The bank also stated that to allow banks time to make preparations, the public should contact bank branches or Relationship Officers of the RBI for availing exchange from May 23. The exchange will be done free of charge. Banks have also been requested to make special arrangements for senior citizens and individuals with disabilities seeking notes exchange.
