The Reserve Bank of India has advised banks to stop issuing Rs 2000 denomination banknotes with immediate effect though the banknotes in Rs 2000 denomination will continue to be legal tender.
The Rs 2000 denomination banknote was introduced in November 2016 under Section 24(1) of RBI Act, 1934, primarily to meet the currency requirement of the economy in an expeditious manner after the monetization.
About 89% of the Rs 2000 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 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. 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,” RBI said.
Important Points to Note
The banknotes in Rs 2000 denomination will continue to be legal tender.
It may be noted that RBI had undertaken a similar withdrawal of notes from circulation in 2013-2014.
People may deposit Rs 2000 banknotes into their bank accounts and/or exchange them for banknotes of other denominations at any bank branch.
Deposit into bank accounts can be made in the usual manner, that is, without restrictions and subject to extant instructions and other applicable statutory provisions.
How To Exchange Rs 2000 Notes
People can deposit Rs 2000 notes into their bank accounts and/or exchange them into banknotes of other denominations at any bank branch.
In a bid to avoid disruption of regular activities of bank branches, exchange of Rs 2000 banknotes into banknotes of other denominations can be made upto a limit of Rs 20,000 at a time at any bank starting from May 23,2023.
To complete the exercise in a time bound manner and give adequate time to people, all banks shall provide deposit and or exchange facility for Rs 2000 banknotes until September 30, 2023.