Government to Withdraw INR 2000 Currency Note from Circulation, But to Continue as Legal Tender The INR 2000 denomination banknote was introduced in November 2016 to meet the currency requirement of the economy in an expeditious manner after the withdrawal of legal tender status of all INR 500 and INR 1000 banknotes in circulation at that time.
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The Reserve Bank of India on Friday announced discontinuation of INR 2,000 notes from circulation. Public is given a window of four months ( till September 30, 2023) to exchange or deposit the currency notes in their bank accounts. The exchange facility for these currency notes will commence from May 23. However, the currency will continue to remain legal tender till then.
"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. 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," reads the press release.
The INR 2000 denomination banknote was introduced in November 2016 under Section 24(1) of RBI Act, 1934, to meet the currency requirement of the economy in an expeditious manner after the withdrawal of legal tender status of all INR 500 and INR 1000 banknotes in circulation at that time.
According to the press release, the objective of introducing INR 2000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, printing of INR 2000 banknotes was stopped in 2018-19.
"About 89% of the INR 2000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life-span of 4-5 years. The total value of these banknotes in circulation has declined from ₹6.73 lakh crore at its peak as on March 31, 2018 (37.3% of Notes in Circulation) to ₹3.62 lakh crore constituting only 10.8% of Notes in Circulation on March 31, 2023. It has also been observed that this denomination 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," said the press release.
How much can be deposited at once?
While deposit into bank accounts can be made without restrictions subject to compliance with extant Know Your Customer (KYC) norms and other applicable statutory / regulatory requirements, there is, however, a limit for exchange of up to INR 20,000 at a time at any bank.
A non-account holder also can exchange INR 2000 banknotes up to a limit of INR 20,000 at a time at any bank branch, according to the RBI.
Where can you exchange notes?
Besides banks, exchange can also be made at 19 Regional Offices (ROs) of RBI having Issue Departments from May 23, 2023. Moreover, notes can also exchanged via Business Correspondents (BCs) upto a limit of INR 4000 per day for an account holder.