On May 19, the Reserve Bank of India (RBI) made a significant announcement regarding the withdrawal of Rs 2,000 notes in circulation. The public was given time until September 30 to either deposit the currency notes in their bank accounts or exchange them.
As of July 3, 2023, the RBI disclosed that 76% of the Rs 2,000 banknotes in circulation have been returned to banks. The total value of Rs 2,000 banknotes received back from circulation, after the announcement on May 19, amounted to Rs 2.72 lakh crore as of June 30, 2023. As a result, the total amount of Rs 2,000 banknotes in circulation by June 30 stood at Rs 0.84 lakh crore.
The data collected from major banks indicates that approximately 87% of the returned banknotes were in the form of deposits, while the remaining 13% were exchanged into other denomination banknotes.
The RBI urges the public to utilize the next three months to deposit and/or exchange their remaining Rs 2,000 banknotes to avoid any rush in the last few days before the September 30, 2023 deadline.
Background and Intention
The Rs 2,000 denomination banknote was introduced in November 2016 to meet the currency requirement of the economy expeditiously after the withdrawal of the legal tender status of all Rs 500 and Rs 1000 banknotes. The RBI had previously fulfilled its goal with the introduction of other denomination banknotes and decided to stop printing Rs 2,000 banknotes in 2018-19. In line with the ‘Clean Note Policy’ of the Reserve Bank of India, it has now been decided to withdraw the Rs 2,000 denomination banknotes from circulation. However, the Rs 2,000 banknotes will continue to be a legal tender until September 2023, encouraging holders to exchange or deposit them before the given deadline.
The withdrawal of Rs 2,000 banknotes marks a significant move by the RBI to streamline the currency circulation in the country and facilitate the use of other denominations. The public’s cooperation in returning or exchanging the notes in a timely manner is essential to ensure a smooth transition.
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