Rs 2000 Notes withdrawn from Circulation; to remain Legal

TNI Bureau: The Reserve Bank of India (RBI) has made a significant decision to halt the issuance of ₹2000 denomination banknotes with immediate effect. However, it emphasizes that the existing ₹2000 banknotes will continue to remain legal tender.

The introduction of the ₹2000 banknote in November 2016 aimed to swiftly address the currency requirements of the economy following the withdrawal of the ₹500 and ₹1000 banknotes. As the circulation of banknotes in other denominations has improved over time, the objective of introducing the ₹2000 banknote has been fulfilled, leading to the cessation of its printing in 2018-19.

According to the RBI’s assessment, approximately 89% of the ₹2000 banknotes currently in circulation were issued prior to March 2017 and are nearing the end of their estimated lifespan of 4-5 years. The total value of these banknotes in circulation has significantly decreased, constituting just 10.8% of the total notes in circulation as of March 31, 2023, compared to its peak of ₹6.73 lakh crore.

 

 

Moreover, it has been observed that the ₹2000 denomination is not commonly utilized for daily transactions. The stock of banknotes in other denominations remains sufficient to cater to the currency requirements of the public.

In line with its “Clean Note Policy,” the RBI has decided to withdraw the ₹2000 denomination banknotes from circulation. However, it emphasizes that these banknotes will continue to be legal tender, ensuring that individuals can still use them for transactions.

To facilitate a smooth transition, the RBI has outlined guidelines for the public. Individuals are encouraged to deposit their ₹2000 banknotes into their bank accounts or exchange them for banknotes of other denominations at any bank branch. Deposits can be made without restrictions, adhering to the usual process and applicable regulations.

For convenience and to minimize disruptions at bank branches, the exchange of ₹2000 banknotes for banknotes of other denominations will be limited to ₹20,000 at a time, starting from May 23, 2023. Banks have been directed to offer deposit and exchange facilities for ₹2000 banknotes until September 30, 2023.

Additionally, the RBI’s 19 Regional Offices with Issue Departments will provide the facility to exchange ₹2000 banknotes up to the limit of ₹20,000 at a time, starting from May 23, 2023.

The RBI advises members of the public to utilize the time until September 30, 2023, to deposit or exchange their ₹2000 banknotes. To provide further information and convenience, the RBI has published a document containing Frequently Asked Questions (FAQs) on its website.