RBI to Withdraw Rs 2,000 Notes from Circulation; Will Continue to Remain Legal Tender

The Reserve Bank of India (RBI) on Friday announced to withdraw Rs 2000 currency note from circulation. The notes will continue to be legal tender.

To complete the exercise in a time-bound manner and to provide adequate time to the members of public, all banks shall provide deposit and/or exchange facility for Rs 2000 bank notes until September 30, 2023, the RBI said.

“Rs 2000 currency note will remain legal tender after 30th September too. RBI expects that 4 month time is enough for people to exchange notes with the banks. Most of the Rs 2000 notes that are in circulation will return to banks within the given time frame of 30th September. This is a routine exercise of RBI and people need not panic,” sources told ANI.

The RBI has advised banks to stop issuing Rs 2000 denomination banknotes with immediate effect.

Exchange Rs 2,000 Notes at Banks from May 23

In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, the 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

A person can also exchange Rs 2,000 notes upto the limit of Rs 20,000 at a time at the 19 Regional Offices (ROs) of RBI from May 23, 2023.

Objective of Introducing Rs 2,000 Notes Was Met: RBI

The central bank said the objective of introducing Rs 2000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, printing of Rs 2000 banknotes was stopped in 2018-19, it said.

“Members of the public may deposit Rs 2000 banknotes into their bank accounts and/or exchange them into 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,” read the press release.

RBI Explains Why Rs 2,000 Notes Are Being Withdrawn

The RBI said that Rs 2,000 note is not commonly used for transactions and the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public.

“About 89% of the Rs 2000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life-span 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….,” RBI’s press release said.

“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. The banknotes in Rs 2000 denomination will continue to be legal tender,” it added.