₹2000 Denomination Banknotes – Withdrawal from Circulation; Will continue as Legal Tender
Introduction
In a recent announcement, the Reserve Bank of India (RBI) has decided to withdraw the ₹2000 denomination banknotes from circulation. This decision comes as part of the “Clean Note Policy” and is aimed at ensuring the efficiency of currency circulation in the country. While the ₹2000 banknotes will no longer be issued, they will continue to be legal tender. In this blog post, we will delve deeper into the reasons behind this decision and its implications for the public.
Background
The ₹2000 banknotes were introduced in November 2016 to address the currency requirement of the economy after the withdrawal of ₹500 and ₹1000 banknotes as legal tender. However, since then, the printing of ₹2000 banknotes was halted in 2018-19 as an adequate supply of banknotes in other denominations became available.
Current Situation
As of March 31, 2023, the value of ₹2000 banknotes in circulation has declined significantly, constituting only 10.8% of the total notes in circulation. It has been observed that this denomination is not commonly used for transactions, with the stock of banknotes in other denominations being sufficient to meet the public’s currency requirements.
Withdrawal Process
In line with the “Clean Note Policy,” the RBI has decided to withdraw the ₹2000 denomination banknotes from circulation. However, these banknotes will continue to be legal tender. This means that individuals can still use them for transactions, and banks are obligated to accept them.
Depositing and Exchanging ₹2000 Banknotes
Members of the public can deposit ₹2000 banknotes into their bank accounts in the usual manner, without any restrictions. Additionally, individuals can exchange these banknotes for banknotes of other denominations at any bank branch. The exchange limit is set at ₹20,000 at a time, starting from May 23, 2023.
Timeframe and Guidelines
To ensure a smooth transition and provide ample time for the public, all banks will offer deposit and exchange facilities for ₹2000 banknotes until September 30, 2023. The Reserve Bank of India has issued separate guidelines to banks regarding this process.
Regional Offices of RBI
Exchange facilities for ₹2000 banknotes up to the limit of ₹20,000 will also be available at the 19 Regional Offices (ROs) of RBI with Issue Departments, starting from May 23, 2023.