The Reserve Bank of India on Friday withdrew ₹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 ₹2,000 denomination bank note was introduced in November 2016 after the Modi government had introduced 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. Also, about 89 per cent 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.
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.
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.
The decision was taken as per the ‘Clean Note Policy’ of the central bank. The people 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.
The exchange of ₹2000 banknotes into banknotes of othe denominations can be made upto a limit of ₹20,000/- at a time at any bank starting from May 23, 2023.