RBI’s Decision: Withdrawal of Rs 2000 Note from Circulation while Maintaining Legal Tender Status
- According to a statement from the Reserve Bank of India (RBI), banks have been directed to offer deposit and/or exchange services for ₹2,000 notes until September 30, 2023. The RBI has assured citizens that they will still be able to deposit ₹2,000 banknotes into their accounts or exchange them for banknotes of different denominations at any branch of a bank within the given timeframe.
The Reserve Bank of India (RBI) has made a decision to withdraw Rs 2000 banknotes from circulation, but they will still be accepted as valid currency. The RBI has instructed banks to stop issuing ₹2000 banknotes starting immediately. The ₹2000 banknote was introduced in November 2016 to quickly meet the currency needs of the economy after the withdrawal of ₹500 and ₹1000 banknotes, which were no longer considered legal tender at that time.
The ₹2000 currency note will continue to be accepted as legal tender even after September 30th. The Reserve Bank of India (RBI) believes that the four-month period is sufficient for people to exchange their ₹2000 notes at banks. It is expected that a majority of the ₹2000 notes currently in circulation will be returned to banks by the given deadline. According to sources quoted by news agency ANI, this is a regular procedure carried out by the RBI, and there is no need for people to worry or panic.
“The objective of introducing ₹2000 banknotes were met once banknotes in other denominations became available in adequate quantities,”
RBI said in a statement
In the financial year 2018-19, the printing of ₹2000 banknotes was stopped. Majority of the ₹2000 banknotes, around 89%, were issued before March 2017 and they have now reached the end of their expected lifespan of 4-5 years. The total value of these banknotes in circulation has decreased from ₹6.73 lakh crore at its peak on March 31, 2018 (which accounted for 37.3% of all notes in circulation) to ₹3.62 lakh crore, making up only 10.8% of all notes in circulation as of March 31, 2023. The statement also mentioned that the ₹2000 denomination is not commonly used for everyday transactions.
The Reserve Bank of India (RBI) further stated that there is an adequate stock of banknotes in other denominations to fulfill the currency requirements of the public.
Taking into consideration the “Clean Note Policy” of the Reserve Bank of India (RBI), a decision has been made to withdraw ₹2000 banknotes from circulation. However, it’s important to note that the ₹2000 banknotes will still be accepted as legal tender. This withdrawal of notes from circulation is similar to what the RBI did in 2013-2014.
The RBI has stated that members of the public can deposit their ₹2000 banknotes into their bank accounts or exchange them for banknotes of other denominations at any bank branch. Deposits into bank accounts can be done as usual, without any restrictions, following the existing guidelines and applicable laws.
To ensure smooth operations and avoid disruption in regular banking activities, the exchange of ₹2000 banknotes for banknotes of other denominations can be done up to a limit of ₹20,000 at a time, starting from May 23, 2023.
