Rs 2,000 Notes withdrawn from circulation; Exchange them before Sept; Guidelines issued

 

New Delhi: The Reserve Bank of India said it will withdraw Rs 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 Rs 2,000 notes for exchange with lower denomination one from May 23.

The RBI has told all banks to stop issuing Rs 2,000 notes immediately. However, the banknotes in Rs2000 denomination will continue to be legal tender. The RBI started printing the Rs 2,000 note in November 2016 after Prime Minister Narendra Modi scrapped high-value Rs 1,000 and Rs 500 notes overnight. ‘The objective of introducing Rs 2,000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, printing of Rs 2000 banknotes was stopped in 2018- 19’, the RBI said in a statement.

‘In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of Rs 2,000 banknotes 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. ‘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 Rs2000 banknotes until September 30, 2023. Separate guidelines have been issued to the banks,’ RBI noted in its release.

The central bank said people can deposit or exchange for lower denomination notes till September 30. ‘About 89% of the Rs 2,000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated lifespan of four-five years. The total value of these banknotes in circulation 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’, the RBI said. ‘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’, RBI release said. The RBI had undertaken a similar withdrawal of notes from circulation in 2013-2014.