In a recent announcement, the Reserve Bank of India (RBI) has decided to withdraw the ₹2000 denomination banknotes from circulation. Introduced in November 2016, these banknotes were initially intended to address the currency requirements of the economy after the withdrawal of ₹500 and ₹1000 notes. However, with the availability of banknotes in other denominations and the observation that ₹2000 notes are not commonly used for transactions, the RBI has made this decision. It is important to note that while these banknotes are being withdrawn from circulation, they will continue to be legal tender.
Background:
The ₹2000 banknotes were introduced to meet the immediate currency requirement of the economy following the demonetization of ₹500 and ₹1000 notes. However, their printing was stopped in 2018-19.
Declining Circulation:
Approximately 89% of the ₹2000 banknotes were issued prior to March 2017 and are nearing the end of their estimated life-span of 4-5 years. The total value of these notes in circulation has significantly declined from ₹6.73 lakh crore to ₹3.62 lakh crore as of March 31, 2023.
Clean Note Policy:
The withdrawal of ₹2000 banknotes is in line with the RBI's "Clean Note Policy," which aims to ensure the circulation of clean and good-quality banknotes.
Legal Tender:
Despite the withdrawal, ₹2000 banknotes will continue to be legal tender, meaning they can be used for transactions and exchanged at banks.
Deposit and Exchange:
Members of the public can deposit ₹2000 banknotes into their bank accounts in the usual manner, without any restrictions. Additionally, the banknotes can be exchanged for other denominations up to a limit of ₹20,000 at a time, starting from May 23, 2023.
Timeframe:
Banks will provide deposit and exchange facilities for ₹2000 banknotes until September 30, 2023, to ensure a smooth transition.
RBI Regional Offices:
The 19 Regional Offices of RBI having Issue Departments will also offer exchange facilities for ₹2000 banknotes up to the limit of ₹20,000 at a time, starting from May 23, 2023.
Ceased Issuance:
Banks have been advised by the RBI to stop issuing ₹2000 denomination banknotes immediately.
Conclusion:
The withdrawal of ₹2000 banknotes from circulation by the RBI is a step towards promoting a more efficient and effective currency system. While these banknotes can still be used as legal tender, individuals are encouraged to deposit or exchange them within the specified timeframe. The RBI has provided detailed guidelines and a document of Frequently Asked Questions (FAQs) to assist the public in this process.
Source:-https://m.rbi.org.in//Scripts/BS_PressReleaseDisplay.aspx?prid=55707
