RBI to withdraw Rs 2,000 notes from circulation: To be legal tender
The Reserve Bank of India has decided to withdraw Rs 2,000 denomination banknotes from circulation. RBI has said members of the public may deposit Rs 2,000 banknotes into their bank accounts or exchange them for banknotes of other denominations at any bank branch. The Rs 2,000 notes, however, will continue to be legal tender.
In a statement released on Friday, the central bank stated that in pursuance of the “Clean Note Policy” of the Reserve Bank of India, it has decided to withdraw the ₹2000 denomination banknotes from circulation.
The central bank added that in order to ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of Rs 2000 banknotes into banknotes of other denominations can be made upto a limit of ₹20,000/- at a time at any bank starting from May 23, 2023.
Additionally, the facility for exchange of Rs 2,000 bank notes up to the limit of Rs 20,000 at a time will be provided at the 19 Regional Offices of the RBI having issue departments from May 23.
The RBI has added that in order to complete the exercise in a time-bound manner and to provide adequate time to the members of the public, all banks shall provide deposit and/or exchange facility for ₹2000 banknotes until September 30, 2023.
Explaining the move, the RBI said that About 89% of the ₹2000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life span 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. RBI added that it has also been observed that this denomination is not commonly used for transactions.