In a significant move, the Reserve Bank of India (RBI) has announced the withdrawal of the ₹2000 denomination banknotes from circulation while emphasizing their continued acceptance as legal tender. Effective immediately, banks have been instructed to cease issuing ₹2000 banknotes. This decision comes as a part of the RBI's routine exercise and is aimed at optimizing the currency supply in the economy.
Introduced in November 2016 to address the currency requirements after the demonetization of ₹500 and ₹1000 banknotes, the ₹2000 denomination banknote has fulfilled its intended purpose. The RBI stated that the printing of ₹2000 banknotes was halted in 2018-19. Currently, approximately 89% of these banknotes were issued before March 2017, nearing their estimated lifespan of 4-5 years.
As per the RBI's statement, the total value of ₹2000 banknotes in circulation has declined substantially, from ₹6.73 lakh crore at its peak on March 31, 2018, to ₹3.62 lakh crore, constituting only 10.8% of the total notes in circulation on March 31, 2023. Furthermore, the RBI observed that this particular denomination is not commonly used for day-to-day transactions.
Addressing any concerns, the RBI reassured the public that the withdrawal of ₹2000 banknotes is a routine measure, and there is no need for panic. The RBI expects that the majority of these banknotes will be returned to banks within the given timeframe of September 30. Moreover, the stock of banknotes in other denominations remains sufficient to meet the public's currency requirements.
Under the "Clean Note Policy" of the RBI, the decision to withdraw the ₹2000 banknotes has been made. The banknotes will retain their legal tender status, allowing individuals to deposit them in their bank accounts or exchange them for banknotes of different denominations at any bank branch. The deposit process remains unaffected, subject to existing guidelines and statutory provisions.
To ensure smooth operations and prevent disruptions in banking activities, individuals will be able to exchange ₹2000 banknotes for other denominations up to a limit of ₹20,000 at any bank starting from May 23, 2023. This step aims to provide operational convenience to the public during the transition period.
TAGS: Reserve Bank of India withdraws ₹2000 note circulation legal tender banks issuing November 2016 RBI Act 1934 currency requirement expeditious manner withdrawal of legal tender status ₹500 ₹1000 banknotes advise immediate effect routine exercise panic 30th September exchange notes printing stopped 2018-19 89% issued prior to March 2017 estimated life-span decline in value not commonly used for transactions clean note policy deposit exchange bank accounts denominations operational convenience disruption regular activities limit May 23 2023.
