NEW DELHI: That evening of November 2016 returned for a fleeting moment as the Reserve Bank of India (RBI) decided to withdraw the ₹2000 notes from circulation.
However, the general public need not panic, as the RBI has mentioned that the notes will continue to be legal tender. But it asked the people to exchange them before September 30, 2023.
“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 RBI said on Friday.
The lessons of demonetisation were surely learned as the RBI added, “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 the public, all banks shall provide deposit and/or exchange facility for ₹2000 banknotes until September 30, 2023.”
In its decision, the RBI cited a lack of popularity as the reason behind the discontinuation of the ₹2000 banknotes. “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 of 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,” RBI said.
Stating that it had asked all banks to stop issuing ₹2,000 currency notes with immediate effect, the central bank added, “In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of ₹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 ₹2000 notes came into existence following the November 2016 demonetisation of ₹1000 and old ₹500 banknotes.