On Friday, the Reserve Bank of India (RBI) said that the Rs 2,000 bills would be withdrawn. But the Rs 2,000 notes will still be accepted as payment. In a surprise move, the Reserve Bank said on Friday that Rs 2,000 notes would no longer be legal tender.
However, the public has until September 30 to put them in bank accounts or exchange them at banks. Unlike the shocking demonetization in November 2016, when old Rs 500 and Rs 1,000 notes were no longer valid overnight, Rs 2,000 will remain valid until September 30.
The Reserve Bank of India (RBI) said that it had asked banks to stop giving out Rs 2,000 notes immediately. The RBI did not say how much can be put into a bank account with Rs 2,000 notes, but you can exchange up to Rs 20,000 (10 Rs 2,000 notes) at a time for other currency notes.
From May 23, exchanging up to Rs 20,000 at a time in Rs 2,000 banknotes would be possible. Refer to the tweet linked below for more details published by the ReserveBankOfIndia Official Twitter account:
₹2000 Denomination Banknotes – Withdrawal from Circulation; Will continue as Legal Tenderhttps://t.co/2jjqSeDkSk
— ReserveBankOfIndia (@RBI) May 19, 2023
People are worried that the most significant bills are being used to hide illegal money. 2018-2019, the RBI stopped making Rs 2,000 notes because they were rarely used. The Rs 2,000 banknote came out in November 2016, mainly to meet the economy’s need for cash quickly after all Rs 500 and Rs 1,000 banknotes in circulation at the time lost their legal tender status.
Here is the link to the recent guidelines press release issued by RBI, which might interest you to read: RBI Press Release Display.
The RBI also said that it has seen that the Rs 2,000 note is not used very often in deals. Also, the stock of banknotes in other amounts is still enough to meet the public’s currency needs, the report said.
“In view of the above, and in pursuance of the ‘Clean Note Policy’ of the Reserve Bank of India, it has been decided to withdraw the Rs 2,000 denomination bank notes from circulation,” the RBI said.
It also said banknotes valued at Rs 2,000 will still be accepted as payment. The central bank has asked people to put Rs 2,000 bills into their accounts or exchange them at any bank office for bills with different values.
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The central bank also said that,
“Members of the public are encouraged to utilise the time up to September 30, 2023 to deposit and/or exchange the Rs 2,000 bank notes.”
It said that deposits into bank accounts can be made in the usual way, which means that there are no limits and that directions and other laws that apply still apply.
The Reserve Bank of India (RBI) said that starting on May 23, 2023, people can swap up to Rs 20,000 at a time of Rs 2,000 banknotes for other denominations of bank notes at any bank. This makes operations more accessible and keeps normal bank branch activities from being interrupted.
“In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of Rs 2,000 bank notes 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,” the RBI said.
The RBI has asked all banks to let people deposit or exchange Rs 2,000 bank notes until September 30, 2023, so that the process can be done on time and so that people have enough time to prepare.
Also, starting May 23, 2023, RBI’s 19 Regional Offices (ROs) with Issue Departments will be able to exchange Rs 2,000 banknotes up to a ceiling of Rs 20,000 at a time.
The RBI says that about 89% of the Rs 2,000 banknotes were printed before March 2017 and are nearing the end of their expected 4–5-year life span.
The total value of these banknotes in circulation has gone down from a high of Rs 6.73 lakh crore on March 31, 2018 (37.3% of all banknotes in circulation) to a low of Rs 3.62 lakh crore on March 31, 2023 (10.8% of all banknotes in circulation).
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In January 2014, the RBI said all bank notes made before 2005 would be withdrawn from circulation.
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