The Reserve Bank of India (RBI) on Friday withdrew ₹2,000 notes from circulation. The central bank has asked banks to provide deposit and exchange facilities for ₹2,000 notes by September 30, 2023.
₹2,000 denomination banknotes were introduced in November 2016 after the Modi government began demonetisation of ₹500 and ₹1,000 notes. According to the RBI, the purpose of introducing the ₹2,000 note was served once banknotes of other denominations were available in sufficient quantity.
RBI had stopped printing of ₹2,000 notes 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 life of 4-5 years.
The total value of these banknotes in circulation has declined from ₹6.73 lakh crore at its peak on March 31, 2018 to ₹3.62 lakh crore, which is only 10.8% of notes in circulation as on March 31, 2023. ,
The RBI observed that the ₹2,000 denomination is not commonly used for transactions and the stock of notes of other denominations is sufficient to meet the currency requirement of the people.
This decision has been taken under the ‘Clean Note Policy’ of the central bank. People can deposit ₹2000 notes in their bank accounts and/or exchange them for bank notes of other denominations at any bank branch. Deposits in bank accounts can be made in the normal manner, i.e. without any restrictions and subject to extant instructions and other applicable statutory provisions.
With effect from May 23, 2023, the limit of exchange of ₹ 2000 banknotes for banknotes of other denominations at any bank may be increased to ₹ 20,000/- at a time.
The total value of banknotes in the denominations of Rs 500 and Rs 2,000 at the end of March 2017 and at the end of March 2022 stood at Rs 9.512 lakh, according to the RBI’s annual report tabled before Parliament by Finance Minister Nirmala Sitharaman in March. crore and 27.057 lakh crore rupees.