The Reserve Bank of India has said it will withdraw ₹ 2,000 notes from circulation and people can exchange or deposit them in their bank accounts by September 30.
The Reserve Bank of India’s (RBI) 19 regional offices and other banks will start taking ₹ 2,000 notes for exchange with lower denomination one from May 23.
They will remain legal tender, the RBI said.
In a statement released on Friday, the central bank stated: “In pursuance of the “Clean Note Policy” of the Reserve Bank of India, it has been decided to withdraw the ₹2000 denomination banknotes from circulation. The banknotes in ₹2000 denomination will continue to be legal tender. To complete the exercise in a time-bound manner and to provide adequate time to the members of public, all banks shall provide deposit and/or exchange facility for ₹2000 banknotes until September 30, 2023.”
The RBI said: “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. 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.”
“Deposit into bank accounts can be made in the usual manner, that is, without restrictions and subject to extant instructions and other applicable statutory provisions,” RBI said.
The central bank added, “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.”
The Rs 2,000 denomination currency note was introduced in November 2016 following the Narendra Modi government’s demonetisation of Rs 1,000 and the old Rs 500 banknotes.