The RBI said the exchange of Rs 2,000 banknotes into banknotes of other denominations can be made up to a limit of Rs 20,000 at a time at any bank starting from May 23, 2023.
Mumbai: The Reserve Bank of India (RBI) on Friday issued a notice saying Rs 2000 currency note will be withdrawn from circulation but it will continue to be legal tender. The central bank also advised the banks to stop issuing Rs 2,000 denomination banknotes with immediate effect. However, the RBI said the banknote will continue to be legal tender. In the notice, the RBI has asked banks to provide deposit and/or exchange facility for Rs 2,000 notes till September 30, 2023.
Reserve Bank of India has advised banks to stop issuing Rs 2000 denomination banknotes with immediate effect though banknotes in Rs 2000 denomination will continue to be legal tender. https://t.co/yLWWpyuahL pic.twitter.com/kPTMqlm1XD
— ANI (@ANI) May 19, 2023
“All banks shall provide deposit and/or exchange facility for Rs 2000 banknotes until September 30, 2023,” the RBI said.
Exchange Facility Available From May 23
The central bank said the exchange of Rs 2000 banknotes into banknotes of other denominations can be made up to a limit of Rs 20,000 at a time at any bank starting from May 23, 2023.
In the meantime, the RBI said that customers will continue to be able to deposit Rs 2000 banknotes into their bank accounts and/or exchange them into banknotes of other denominations at any bank branch up to September 30, 2023.
Rs 2000 Banknote Was Introduced in 2016
It should be noted that Rs 2000 denomination banknote was introduced in November 2016, primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of the legal tender status of all Rs 500 and Rs 1000 banknotes in circulation at that time.
The main objective of launching Rs 2000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, the printing of Rs 2000 banknotes was stopped subsequently in 2018-19, RBI said in a statement.
About 89 per cent of the Rs 2000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life span of four-five years.
The total value of these banknotes in circulation has declined from Rs 6.73 lakh crore at its peak as of March 31, 2018 (37.3 per cent of Notes in Circulation) to Rs 3.62 lakh crore constituting only 10.8 per cent of Notes in Circulation on March 31. , 2023.
Why RBI took the decision?
“It has also been observed that this denomination is not commonly used for transactions. Further, the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public,” RBI said Friday.
“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 Rs 20,000 at a time at any bank starting from May 23, 2023, RBI said.