Rs 2000 Denomination Banknotes Withdrawal from Circulation but Will continue as Legal Tender

Rs 2000 denomination banknote

The Rs 2000 denomination banknote was introduced in November 2016 under Section 24(1) of RBI Act, 1934, primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of legal tender status of all Rs 500 and RS 1000 banknotes in circulation at that time. The objective of introducing Rs 2000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, printing of Rs 2000 banknotes was stopped in 2018-19.

About 89% of the Rs 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 Rs 6.73 lakh crore at its peak as on March 31, 2018 (37.3% of Notes in Circulation) to Rs 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.

Withdrawal of Rs 2000 denomination bank note

In view of the above, and in pursuance of the “Clean Note Policy” of the Reserve Bank of India, it has been decided to withdraw the Rs 2000 denomination banknotes from circulation. The banknotes in Rs 2000 denomination will continue to be legal tender. It may be noted that Reserve Bank of India (RBI) had undertaken a similar withdrawal of notes from circulation in 2013-2014.

The Reserve Bank of India has advised banks to stop issuing RS 2000 denomination banknotes with immediate effect.

What to do with existing Rs 2000 denomination bank notes

Members of the public may deposit Rs 2000 banknotes into their 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.

In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of Rs 2000 banknotes into banknotes of other denominations can be made upto a limit of Rs 20,000/- at a time at any bank starting from May 23, 2023.

To complete the exercise in a time-bound manner and to provide adequate time to the members of public, all banks shall provide deposit and/or exchange facility for Rs 2000 banknotes until September 30, 2023. Separate guidelines have been issued to the banks.

The facility for exchange of Rs 2000 banknotes upto the limit of Rs 20,000/- at a time shall also be provided at the 19 Regional Offices (ROs) of RBI having Issue Departments1 from May 23, 2023.

Exchange of Rs 2000 banknotes through Business Correspondents (BCs) can be made upto a limit of Rs 4000/- per day for an account holder.

A non-account holder also can exchange Rs 2000 banknotes up to a limit of Rs 20,000/- at a time at any bank branch.

Deposit into accounts can be made without restrictions. The Rs 2000 banknotes can be deposited into bank accounts and cash requirements can be drawn thereafter, against these deposits.

The exchange facility shall be provided free of cost.

Members of the public are encouraged to utilise the time up to September 30, 2023 to deposit and/or exchange the Rs 2000 banknotes. 

The facility of exchange of Rs 2000 banknotes across the counter shall be provided to the public in the usual manner, that is, as was being provided earlier.

Banks are advised to provide appropriate infrastructure at the branches such as shaded waiting space, drinking water facilities, etc. considering the summer season.

FAQS on withdrawal of Rs 2000 denomination  banknote

To view the FAQs related to the withdrawal of Rs 2000 denomination banknotes, click here.

Source : RBI