RBI To Withdraw Rs 2,000 Notes: Here Are 5 Key Points To Know

The Reserve Bank of India (RBI) has decided to withdraw Rs 2,000 banknotes from circulation and the notes will continue to be legal tender. The decision has been taken by the RBI as part of the Clean Note Policy. Here are key points to know about the RBI’s decision:

“The Rs 2,000 denomination banknote was introduced in November 2016 under Section 24(1) of the RBI Act, 1934, primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of the legal tender status of all Rs 500 and Rs 1,000 banknotes in circulation at that time,” the RBI said on Friday.

• The objective of introducing Rs 2,000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, the printing of Rs 2,000 banknotes was stopped in 2018-19.
• The RBI has decided to withdraw the Rs 2,000 denomination banknotes from circulation in pursuance of the ‘Clean Note Policy’ of the Reserve Bank of India. The RBI also said “it has also been observed that this denomination (Rs 2,000 banknotes) 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.”
• Clean Note Policy: It was introduced to give the citizens good-quality currency notes and coins. Under this policy, the RBI also instructed the banks to issue only good-quality clean notes to the public and refrain from recycling the soiled notes received by them over their counters.
• According to the RBI data, about 89 per cent of the Rs 2,000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated lifespan of 4-5 years. The total value of these banknotes in circulation has declined from Rs 6.73 lakh crore at its peak as on 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 banknotes in Rs 2,000 denomination will continue to be legal tender till September 30, 2023. You may deposit Rs 2,000 banknotes into your bank accounts and/or exchange them into banknotes of other denominations at any bank branch. Deposit into bank accounts can be made in the usual manner, that is, without restrictions and subject to extant instructions and other applicable statutory provisions.