Reserve Bank Of India Announces Withdrawal Of ₹2000 Banknotes From Circulation

The Reserve Bank of India (RBI) has made an important decision to withdraw the ₹2000 denomination banknotes from circulation while continuing their status as legal tender. The introduction of ₹2000 banknotes in November 2016 was aimed at fulfilling the urgent currency requirements of the economy after the withdrawal of ₹500 and ₹1000 banknotes as legal tender.

However, since then, sufficient quantities of banknotes in other denominations have become available, fulfilling the objective for introducing ₹2000 banknotes. Consequently, the printing of ₹2000 banknotes was halted in 2018-19.

Approximately 89% of the ₹2000 denomination banknotes were issued prior to March 2017 and have reached their estimated lifespan of 4-5 years. The total value of these banknotes in circulation has decreased from ₹6.73 lakh crore (37.3% of Notes in Circulation) on March 31, 2018, to ₹3.62 lakh crore (10.8% of Notes in Circulation) on March 31, 2023.

It has been observed that the usage of ₹2000 banknotes for transactions is not common. Moreover, there is an adequate stock of banknotes in other denominations to meet the currency requirements of the public.

To adhere to the "Clean Note Policy" of the RBI, the decision has been taken to withdraw the ₹2000 denomination banknotes from circulation. However, these banknotes will continue to be considered legal tender.

Similar to a premature withdrawal of banknotes conducted by the RBI in 2013-2014, members of the public are advised to deposit their ₹2000 banknotes into their bank accounts or exchange them for banknotes of other denominations at any bank branch. Deposits into bank accounts can be made without restrictions, following the usual procedure and subject to applicable instructions and statutory provisions.

To ensure convenience and prevent disruptions at bank branches, exchanges of ₹2000 banknotes for 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.

In order to facilitate a smooth process and allow sufficient time for the public, banks will provide deposit and/or exchange facilities for ₹2000 banknotes until September 30, 2023. Detailed guidelines have been issued to the banks regarding this process.

Additionally, the 19 Regional Offices (ROs) of RBI with Issue Departments1 will also provide the facility for exchanging ₹2000 banknotes up to the limit of ₹20,000/- at a time from May 23, 2023.

The RBI has instructed banks to discontinue the issuance of ₹2000 denomination banknotes immediately.

The public is encouraged to utilize the period up to September 30, 2023, to deposit and/or exchange their ₹2000 banknotes. For further information and convenience, a document containing Frequently Asked Questions (FAQs) on this matter has been made available on the RBI website.

References:

1. Reserve Bank of India - Press Releases: Link