New Delhi: The Reserve Bank of India (RBI) on Friday decided to withdraw Rs 2,000 notes from circulation. However, the bank notes will continue to be legal tender, the bank noted.
In an official notification dated May 19, the bank clarified that consumers can deposit Rs 2,000 notes in their bank accounts and/or exchange them for notes of other denominations at any branch without any restrictions.
From May 23 to September 30, Rs 2,000 notes can be exchanged up to a limit of Rs 20,000. The central bank has also issued separate directions to banks regarding exchange of Rs 2,000 notes in a time-bound manner. The facility of exchange is also provided at those Regional Offices of the Reserve Bank of India which have Issue Departments.
Launched in 2016, under Section 24(1) of the RBI Act, 1934, the Rs 2,000 note was introduced largely to meet the monetary requirement following the loss of legal tender status of Rs 500 and Rs 1,000 banknotes. were brought into vogue which were in vogue earlier. ,
The notification also stated that after making available adequate supply of banknotes in additional denominations in 2016, the target of introducing Rs 2,000 notes was achieved. Consequently, the printing of Rs 2,000 notes was discontinued in 2018-19, the RBI release said.
The notification also states that the decision to demonetise Rs 2,000 notes has been taken under its ‘clean note policy’. Under this policy, only good quality currency notes and coins are given to the consumers while soiled or torn notes are taken back.
Over 89 per cent of the Rs 2,000 notes were printed before March 2017 and are nearing the end of their expected life span of four-five years. The total value of these banknotes in circulation declined from a peak of Rs 6.73 lakh crore on March 31, 2018 (37.3 per cent of notes in circulation) to a low of Rs 3.62 lakh crore by March 31, 2023, which is represents only 10.8 per cent of the notes in circulation, the release read.