INDIA, May 19: The Reserve Bank of India (RBI) on Friday announced that Rs 2,000 notes will only stay on as legal tender, and it would be discontinued from circulation. 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 to 5 years, the RBI said in a notification.
Currency notes of Rs 2,000 were introduced in November 2016, after demonitisation led to Rs 500 and Rs 1,000 notes being banned from use. Explaining the move, the RBI said, "The use of Rs 2,000 notes was fulfilled after other denominations became available in adequate quantities." RBI said the printing of Rs 2,000 notes was stopped in 2018-19.
Here are key points related to RBI's move:
India withdraws 500, 1000 rupee notes in graft fight
The decision to withdraw the Rs 2000 denomination banknotes from circulation was taken under the RBI's 'Clean Note Policy'. However, they will continue as legal tender.
Rs 2,000 denomination banknotes were not commonly used for transactions. The use of these notes declined from Rs 6.73 lakh crore 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.
Notes of other denominations are adequate to meet the currency requirements of the public.
Those with Rs 2,000 notes can return them back to the bank, or exchange them for notes of other denominations from a bank branch. The deposit into bank accounts can be made without restrictions and subject to extant instructions.
The exchange of Rs 2,000 banknotes into banknotes of other denominations can be made to a limit of Rs 20,000 at a time. Banks will provide the exchange and/or deposit facility for these notes till September 30, 2023.
Banks have been advised by the RBI to stop issuing Rs 2000 denomination banknotes with immediate effect. The process of exchange and/or return of notes will begin on May 23.
