The Reserve Bank of India has decided to withdraw Rs 2,000 banknotes from circulation, but they will still be legal tender. It has advised banks to discontinue the issuance of Rs 2,000 banknotes with immediate effect.
Meanwhile, the Reserve Bank of India announced that citizens will be allowed to deposit Rs 2000 banknotes into their bank accounts and/or exchange them for banknotes of other denominations at any bank branch until September 30, 2023.
The Rs 2000 denomination banknote was issued in November 2016, largely to address the economy’s currency needs quickly following the loss of the legal tender status of all Rs 500 and Rs 1000 banknotes in circulation at the time.
When banknotes in other denominations became available in sufficient quantities, the goal of launching Rs 2000 banknotes was met. As a result, the printing of Rs 2000 banknotes was halted in 2018-19, according to the RBI.
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Approximately 89% of Rs 2000 banknotes were issued prior to March 2017 and have reached the end of their anticipated life expectancy of four to five years.
Starting May 23, 2023, exchanges of 2000 banknotes into banknotes of other denominations can be made up to a limit of 20,000/- at any bank to provide operational ease and avoid disruption of ordinary activities of bank branches.
