Reserve Bank of India to withdraw Rs 2,000 currency notes from circulation; know details

New Delhi, May 19: The Reserve Bank of India on Friday announced to withdraw Rs 2,000 currency notes from circulation. However, the notes will continue to be legal tender till September 30.

The ₹2000 denomination banknote was introduced in November 2016 under Section 24(1) of RBI Act, 1934, 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 1,000 banknotes in circulation at that time. 

The objective of introducing Rs 2,000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, the printing of Rs 2,000 banknotes was stopped in 2018-19.

In a statement, the RBI asked banks to provide deposit and/or exchange facility for Rs 2,000 notes until September 30, 2023. The banks have been told to stop issuing Rs 2,000 notes with immediate effect.

The RBI said exchange facility for Rs 2,000 bank notes up to Rs 20,000 at a time would be available from May 23. About 89 per cent of the Rs 2,000 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 on March 31, 2018 (37.3% of Notes in Circulation) to Rs 3.62 lakh crore constituting only 10.8 per cent of notes in circulation on March 31, 2023.

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, adds the RBI statement.