The Reserve Bank of India (RBI) on Friday announced to withdraw the Rs 2,000 denomination banknotes from circulation. However, the Rs 2,000 notes will continue to be legal tender.
POINTS TO KEEP IN MIND:-
● The central bank has asked people to deposit the Rs 2,000 banknotes into their accounts and/or exchange them into banknotes of other denominations at any bank branch.
● Exchange facility for Rs 2,000 bank notes up to Rs 20,000 at a time would be available from May 23, said an RBI statement.
● The RBI has asked banks to provide deposit and/or exchange facility for Rs 2,000 notes until September 30, 2023.
● Additionally, the RBI's 19 Regional Offices (ROs) with Issue Departments will also serve as exchange points until the end of September.
● 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.
● The RBI has also advised banks to stop issuing Rs 2,000 denomination banknotes with immediate effect.
● While the Rs 2,000 notes will be gradually pulled out of circulation, they will remain legal tender beyond the withdrawal date.
● The public can continue to use these notes for transactions and also accept them as payment.
The Rs 2,000 denomination banknote was introduced in November 2016 primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of 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.
About 89% of the Rs 2,000 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 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% of notes in circulation on March 31, 2023.
"It has 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," the RBI said Friday. The printing of Rs 2,000 banknotes was stopped in 2018-19.