RBI to withdraw Rs 2000 bank notes from circulation; to remain as legal tender

RNS: The Reserve Bank of India has decided to withdraw Rs 2,000 denomination banknotes from circulation.

The Reserve Bank of India (RBI) has announced that the public can now use any bank branch to deposit or exchange Rs 2,000 banknotes. However, the Rs 2,000 notes will remain a valid currency.

Following its “Clean Note Policy,” the Reserve Bank of India announced on Friday that it will no longer be issuing Rs 2000 denominations of banknotes.

Starting on 23 May 2023, customers of any bank will be able to convert up to Rs 20,000 in denominations other than Rs 2000 at a time into banknotes of other denominations, as announced by the central bank.

Additionally, beginning on May 23 at the 19 RBI Regional Offices with issuing departments, customers will be able to swap Rs 2,000 bank notes up to the maximum of Rs 20,000 at a time.

The RBI has stated that all banks shall provide a deposit and/or exchange facility for Rs2000 banknotes until September 30, 2023, in order to complete the process in a time-bound manner and to provide the public sufficient time.

RBI cited the fact that 89% of Rs2000 banknotes had been in circulation for more than four and a half years before March 2017 as the reason for the decision. From a high of Rs6.73 lakh crore on March 31, 2018 (37.3% of Notes in Circulation) to a low of Rs3.62 lakh crore on March 31, 2023 (10.8% of Notes in Circulation), the total value of these banknotes in circulation has decreased.

RBI further noted that it has been noted that transactions with this denomination are uncommon.

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