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RBI to withdraw Rs. 2000 notes by Sept 30, will remain legal tender

by Trans World Features | @twfindia 19 May 2023, 09:36 am

New Delhi : The Reserve Bank of India Friday announced that it will withdraw Rs.2,000 notes from circulation and people can exchange or deposit them in their bank accounts by Sept 30.

The central bank's 19 regional offices and other banks will start taking Rs. 2,000 notes for exchange with lower denomination ones from May 23.

However, the notes will still remain legal tender, the RBI said.

In a circular, the RBI has directed all banks to stop issuing Rs. 2,000 notes immediately.

The RBI started printing the Rs. 2,000 note in November 2016 after Prime Minister Narendra Modi scrapped high-value Rs. 1,000 and Rs. 500 notes overnight.

"The objective of introducing ₹ 2,000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, printing of ₹ 2000 banknotes was stopped in 2018- 19," the RBI said in a statement.

"In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of ₹ 2,000 banknotes into banknotes of other denominations can be made up to a limit of ₹ 20,000 at a time at any bank starting from May 23, 2023," the RBI said.

The upper limit to deposit or exchange Rs. 2000 notes till Sept 30 is Rs. 20,000 at a time.

"About 89 per cent of the ₹ 2,000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated lifespan of four-five years. The total value of these banknotes in circulation declined from ₹ 6.73 lakh crore at its peak as on March 31, 2018 (37.3 per cent of notes in circulation) to ₹ 3.62 lakh crore constituting only 10.8 per cent of notes in circulation on March 31, 2023," the RBI said.

The central bank said this note is not commonly used for transactions.

The RBI had undertaken a similar withdrawal of notes from circulation in 2013-2014.