RBI Withdraws Rs 2,000 Currency Notes from Circulation, Provides Exchange Facility for Limited Period
“Reserve Bank of India Announces Withdrawal of ₹2000 Denomination Banknotes from Circulation While Continuing Legal Tender Status”
In a recent development, the Reserve Bank of India (RBI) has decided to withdraw the ₹2000 denomination banknotes from circulation. Introduced in 2016 to address the currency requirement after the demonetization of ₹500 and ₹1000 banknotes, the objective of the ₹2000 banknotes has been fulfilled with the availability of other denominations in sufficient quantities. The printing of ₹2000 banknotes ceased in 2018-19.
Approximately 89% of the ₹2000 banknotes were issued prior to March 2017 and are reaching the end of their estimated life-span of 4-5 years. The value of these banknotes in circulation has declined from its peak of ₹6.73 lakh crore in March 2018 (37.3% of Notes in Circulation) to ₹3.62 lakh crore, accounting for only 10.8% of Notes in Circulation as of March 31, 2023. Furthermore, the usage of this denomination for transactions is not prevalent, and the stock of banknotes in other denominations remains sufficient to meet the public’s currency requirement.
As part of the RBI’s “Clean Note Policy,” the ₹2000 banknotes will be withdrawn from circulation. However, it is important to note that the ₹2000 banknotes will continue to be legal tender.
To facilitate the process, members of the public can deposit ₹2000 banknotes into their bank accounts or exchange them for banknotes of other denominations at any bank branch. Deposits into bank accounts can be made without restrictions and in accordance with existing instructions and statutory provisions. Additionally, starting from May 23, 2023, individuals can exchange ₹2000 banknotes for other denominations up to a limit of ₹20,000 at a time, ensuring operational convenience and avoiding disruption at bank branches.
To ensure a time-bound completion of the exercise and provide ample opportunity for the public, banks will offer deposit and/or exchange facilities for ₹2000 banknotes until September 30, 2023. Separate guidelines have been issued to the banks in this regard. Furthermore, the facility for exchanging ₹2000 banknotes up to the limit of ₹20,000 at a time will also be available at the 19 Regional Offices (ROs) of RBI with Issue Departments, effective from May 23, 2023.
The RBI has advised banks to discontinue the issuance of ₹2000 denomination banknotes with immediate effect. Members of the public are encouraged to utilize the time until September 30, 2023, to deposit and/or exchange their ₹2000 banknotes. For further information and convenience, the RBI has provided a document containing Frequently Asked Questions (FAQs) on this matter, which is available on their website.