BIG News: RBI to withdraw Rs 2,000 notes from circulation, will continue as legal tender
The Reserve Bank of India has decided to withdraw Rs 2,000 denomination banknotes from circulation and asked all to exchange them by September 30, 2023.
In a statement released on Friday, the central bank stated: “In pursuance of the “Clean Note Policy” of the Reserve Bank of India, it has been decided to withdraw the INR 2000 denomination banknotes from circulation. The banknotes in INR 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 the public, all banks shall provide deposit and exchange facility for INR 2000 banknotes until September 30, 2023.”
Explaining the move, the RBI said: “About 89% of the INR 2000 denomination banknotes were issued before 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 INR 6.73 lakh crore at its peak of March 31, 2018 (37.3% of Notes in Circulation) to INR 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.”
Stating that the RBI has asked all banks to stop issuing Rs 2,000 currency notes with immediate effect, the central bank added, “To ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of INR 2000 banknotes into banknotes of other denominations can be made upto a limit of INR 20,000/- at a time at any bank starting from May 23, 2023.”
The Rs 2,000 denomination currency note was introduced in November 2016 following the demonetization of Rs 1,000 and the old Rs 500 banknotes. According to the RBI, the objective of raising the Rs 2,000 banknotes was met once currency in other denominations became available in adequate quantities. As such, the printing of the Rs 2,000 banknotes was already stopped in 2018-19.
Source from - https://indianexpress.com/article/business/rbi-withdraw-rs-2000-note-8618730/
