RBI to stop issuing Rs 2000 currency notes by September 30, here’s why

The Reserve Bank of India is determined to stop issuing currency in the amount of Rs 2,000 and has ordered everyone to swap their notes by September 30, 2023. However, the Rs 2,000 notes would still be accepted as legal tender.

The Central Bank in an official mentioned on Friday: “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.”

Stressing on the given decision, the RBI stated: “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.”

People can deposit Rs 2,000 banknotes into their accounts or exchange them for notes of other denominations at any bank branch, according to the RBI. “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,” it added.

The central bank further 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 RBI claims that after money in other denominations was widely accessible, the goal of launching the Rs 2,000 banknotes was achieved. So, in 2018–19, production of the Rs 2,000 banknotes had long been halted.

Based to the Annual Reports of the RBI that Finance Minister Nirmala Sitharaman submitted to the Parliament in March, the total face value of the 500 and 2,000 rupee banknotes in circulation as of the end of March 2017 and as of the end of March 2022 was 9.512 trillion rupees and Rs 27.057 trillion, respectively.

“No instructions have been given to banks for not filling Rs 2,000 notes in ATMs. Banks make their own assessment of amount and denominational requirement for ATMs on the basis of past usage, consumer requirement, seasonal trend, etc,” she earlier mentioned.