New Delhi: The Reserve Bank of India (RBI) Friday decided to withdraw Rs 2,000 notes from circulation. However, the banknotes would continue to be legal tender, the bank noted.
In an official notification dated 19 May, the bank clarified that consumers can deposit Rs 2,000 notes in their bank accounts and/or exchange them into banknotes of other denominations at any branch without restriction.
The exchange of Rs 2,000 notes can be made up to a limit of Rs 20,000 from 23 May till 30 September. The central bank has also issued separate guidelines to banks regarding the exchange of Rs 2,000 notes in a time-bound manner. The facility for exchange has also been provided at RBI regional offices that have issue departments.
Launched in 2016, under Section 24(1) of the RBI Act, 1934, the Rs 2,000 banknote was brought into circulation largely to satisfy the monetary requirement after the loss of legal tender status of Rs 500 and Rs 1,000 banknotes that were in circulation earlier.
The notification also noted that after a sufficient supply of banknotes in additional denominations were made available in 2016, the goal of introducing Rs 2,000 notes was achieved. Consequently, printing of Rs 2,000 notes was discontinued in 2018–19, the RBI release said.
The notification also said that the decision to withdraw Rs 2,000 notes has been taken in accordance with its ‘Clean Note Policy’. Under this policy, only good quality currency notes and coins are given to consumers while soiled or torn notes are withdrawn.
Over 89 per cent of Rs 2,000 notes were printed before March 2017 and are nearing the end of their four-five year expected lifespan. The total value of these banknotes in circulation has decreased from its peak of Rs 6.73 lakh crore as of 31 March, 2018 (37.3 per cent of notes in circulation) to its lowest point of Rs 3.62 lakh crore as of 31 March, 2023, which represents only 10.8 per cent of notes in circulation, the release read.
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