RBI withdraw Rs 2000 note after seven years; fixes time, limit to deposit in banks ; to remain legal tender
Kanwar Inder Singh/ royalpatiala.in News/ May 19,2023
The 2000 denomination banknote was introduced in November 2016 under Section 24(1) of RBI Act, 1934, primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of legal tender status of all 500 and 1000 banknotes in circulation at that time. The objective of introducing 2000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, printing of 2000 banknotes was stopped in 2018-19.
About 89% of the 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 6.73 lakh crore at its peak as on March 31, 2018 (37.3% of Notes in Circulation) to 3.62 lakh crore constituting only 10.8% of Notes in Circulation on March 31, 2023. It has also been observed that this denomination is not commonly used for transactions. Further, the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public.
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 2000 denomination banknotes from circulation.
The banknotes in 2000 denomination will continue to be legal tender.
It may be noted that RBI had undertaken a similar withdrawal of notes from circulation in 2013-2014.
Accordingly, members of the public may deposit 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.
In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of 2000 banknotes into banknotes of other denominations can be made upto a limit of 20,000/- at a time at any bank starting from May 23, 2023.
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 2000 banknotes until September 30, 2023. Separate guidelines have been issued to the banks.
The facility for exchange of 2000 banknotes upto the limit of 20,000/- at a time shall also be provided at the 19 Regional Offices (ROs) of RBI having Issue Departments1 from May 23, 2023.
The Reserve Bank of India has advised banks to stop issuing 2000 denomination banknotes with immediate effect.
Members of the public are encouraged to utilise the time up to September 30, 2023 to deposit and/or exchange the 2000 banknotes. A document on Frequently Asked Questions (FAQs) in the matter has been hosted on the RBI website for information and convenience of the public.