The Reserve Bank of India (RBI) has decided to withdraw ₹2,000 currency notes from circulation. The central bank has asked banks to provide deposit and exchange facilities for ₹2,000 notes until September 30, 2023. The decision was taken as per the ‘Clean Note Policy’ of the central bank.
Background
The ₹2,000 denomination bank note was introduced in November 2016 following the demonetisation of ₹500 and ₹1,000 notes. As per RBI, the objective of introducing ₹2,000 notes was met once banknotes in other denominations became available in adequate quantities. The RBI had stopped the printing of ₹2,000 banknotes in 2018-2019.
Reasons for Withdrawal
The RBI observed that the ₹2,000 denomination is not commonly used for transactions and the stock of other denomination notes is adequate to meet the currency requirement of people. Further, about 89% of the ₹2,000 denomination notes issued before March 2017 are said to be at the end of their estimated lifespan of 4-5 years.
Withdrawal Process
To complete the exercise in a time-bound manner and to provide adequate time for the members of the public, all banks shall provide deposit and/or exchange facilities for ₹2,000 banknotes until September 30, 2023. Deposit into bank accounts can be made without restrictions and subject to instructions and other applicable statutory provisions. The 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.
Impact on Citizens
While banks have been advised not to issue ₹2,000 banknotes with immediate effect, citizens need not worry as the withdrawal will be carried out in a “time-bound” and systematic manner. The ₹2,000 notes that are currently in circulation will continue to be legal tender and people can continue to use them for transactions and also receive them in payment. The RBI has “encouraged” the public to deposit and/or exchange these banknotes on or before September 30, 2023.
The Reserve Bank of India Withdraws ₹2,000 Currency Notes from Circulation
In summary, the Reserve Bank of India has taken a step to withdraw ₹2,000 currency notes from circulation as the denomination is not commonly used for transactions and the stock of other denomination notes is adequate to meet currency requirements. Citizens need not worry as the withdrawal process will be carried out systematically and notes can be exchanged or deposited until September 30, 2023.
FAQs
1. What is the reason behind the withdrawal of ₹2,000 currency notes?
The Reserve Bank of India observed that the ₹2,000 denomination is not commonly used for transactions and the stock of other denomination notes is adequate to meet the currency requirement of people.
2. Can citizens still use the ₹2000 notes?
Yes, the ₹2,000 notes that are currently in circulation will continue to be legal tender and people can continue to use them for transactions and also receive them in payment.
3. How can citizens exchange their ₹2,000 notes?
Citizens can exchange their ₹2,000 notes into banknotes of other denominations up to a limit of ₹20,000/- at a time at any bank starting from May 23, 2023.
4. When is the last date to exchange ₹2,000 notes?
The last date to exchange or deposit ₹2,000 notes is September 30, 2023.
5. Is there any limit to depositing ₹2,000 notes into a bank account?
There are no restrictions on depositing ₹2,000 notes into a bank account, subject to extant instructions and other applicable statutory provisions.
