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The Reserve Bank of India (RBI) has made a shocking announcement to withdraw Rs 2,000 denomination banknotes from circulation.
RBI withdraws Rs 2,000 notes from circulation
In simple words, RBI has withdrawn Rs 2,000 notes from circulation and people can exchange or deposit them in their banks by September 30. According to the central bank, almost 19 RBI’s regional officers and other banks will start taking Rs 2,000 banknotes for exchange with a lower denomination from May 23. They will continue to be legal tender.
Immediate stoppage of banknotes
The RBI has told all the banks to put an immediate stoppage on issuing Rs 2,000 notes.
After Prime Minister Narendra Modi scrapped high-value Rs 1,000 and Rs 500 notes overnight in November 2016, the RBI begin to print the Rs 2,000.
What was the objective of introducing Rs 2,000 notes?
According to the official statement issued by RBI, it said, “The objective of introducing ₹ 2,000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, the printing of ₹ 2000 banknotes was stopped in 2018- 19.”
“In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of ₹ 2,000 banknotes into banknotes of other denominations can be made up to a limit of ₹ 20,000 at a time at any bank starting from May 23, 2023,” it said.
Final deadline till Sept 30
Now, people can easily deposit or exchange for lower denomination notes till September 30 this year for up to Rs 20,000 at a time.
Speaking to the media, a source revealed that RBI may extend the deadline from September 30 if needed, however, even if anyone has Rs 2,000 note after the current deadline, it will remain a valid tender.
“About 89 per cent of the ₹ 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 of March 31, 2018 (37.3 per cent of notes in circulation) to Rs 3.62 lakh crore constituting only 10.8 per cent of notes in circulation on March 31, 2023,” the RBI said.
The central bank said this note is not commonly used for transactions. The RBI had undertaken a similar withdrawal of notes from circulation in 2013-2014.
