The 2,000 note was first out by the RBI in November 2016. Additionally, it was after Prime Minister Narendra Modi overnight scrapped high-value currencies worth Rs 1,000 and Rs 500. So, according to the central bank, it will now eliminate Rs 2000 banknotes from circulation. People can, however, exchange them or put them in their bank accounts. Before March 2017, around 89% of the Rs 2000 denomination banknotes were present. Here is all the information you require.
RBI To Eliminate Rs 2000 Banknotes
On Friday, the Reserve Bank of India said it has surprisingly chosen to stop issuing Rs 2,000 currency notes. The RBI does highlight that Rs. 2,000 banknotes will continue to be valid as legal tender. Additionally, this RBI directive will take effect right away. The Reserve Bank of India also has a justification for the action. It said that there are sufficient supplies of banknotes in various denominations. RBI mentions,
“In pursuance of the ‘Clean Note Policy’ of the Reserve Bank of India, it has been decided to withdraw the Rs 2,000 denomination bank notes from circulation”.
The decision was made in response to worries that the highest denomination notes might be used to store black money. In 2018–19, the RBI stopped producing Rs 2,000 notes because they were rarely ever used. According to the central bank, this note is not frequently in use. The RBI also withdrew a comparable amount of currency from circulation in 2013 and 2014. It also said that,
“Members of the public can continue to use Rs 2,000 banknotes for their transactions and also receive them in payment. However, they are encouraged to deposit and/or exchange these notes on or before September 30, 2023”.
Exchange Of The Banknotes
The central bank requests that people deposit Rs 2,000 bank notes into their bank accounts. You can exchange them at any bank location for banknotes of different denominations. This entire process will be free of cost. Additionally, deposits into bank accounts will be as usual, that is, without limitations. However, this will depend on current guidelines and additional relevant statutory regulations. RBI also states,
“To ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of Rs 2,000 bank notes 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”.
If necessary, the RBI may extend the deadline past September 30. However, even if someone has a 2,000 note past the deadline, it remains eligible for use as payment.
The plan is for RBI to confiscate and maybe destroy all of the Rs 2,000 notes currently in circulation. Additionally, the RBI’s best-case scenario is that after September 30, there won’t be any Rs 2,000 notes floating around in the economy. This is so that it may get it all back.