The Reserve Bank of India has announced the withdrawal of INR 2,000 notes from circulation in pursuance of the central bank’s Clean Note Policy.
The 2000-rupee note, introduced into circulation in 2016, will remain legal tender but citizens have been asked to deposit or exchange these notes by Sept. 30, 2023.
The demonetization of INR 500 and INR 1,000 notes in 2016 rattled the banking system as Indians flocked to bank branches and ATMs to get their notes exchanged for legal tender, and the sudden move left many citizens in anger and dismay at the sheer abruptness of the move.
RBI has frequently said that it wants to reduce high-value notes in circulation and had stopped printing 2000-rupee notes over the past four years.
“This denomination is not commonly used for transactions,” the Reserve Bank of India said in its communication while the decision to withdraw these notes.
Statistics reveal the total value of these banknotes, which are in circulation and issued before March 2017, has declined from INR 6.73 lakh cr at its peak of March 31, 2018, to INR 3.62 lakh cr constituting only 10.8% of notes in circulation on March 31, 2023.
“Making such a move ahead of the general elections is a wise decision,” said Rupa Rege Nitsure, group chief economist at L&T Finance Holdings. “People who have been using these notes as a store of value may face inconvenience,” she said.
RBI has issued some guidelines for citizens, you need to follow these steps to exchange your INR 2,000 notes:
- You can deposit your INR 2,000 banknote into your bank account and/or exchange them for 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 applicable provisions.
- The exchange of INR 2,000 banknotes into banknotes of other denominations can be made up to a limit of INR 20,000/- at a time at any bank starting from May 23, 2023. All banks will provide deposit and/or exchange facilities for INR 2,000 banknotes until September 30, 2023.
- Citizens can utilize time up to September 30, 2023, to deposit and/or exchange the INR 2,000 banknotes.
By following the above steps you will exchange your INR 2,000 notes with a bank or other financial institution allowed by RBI for exchanging notes.
Deposit of 2,000 banknotes into a bank account can be made without restrictions subject to compliance with extant Know Your Customer (KYC) norms and other applicable statutory or regulatory requirements.
But at a time public can exchange 2,000 banknotes up to a limit of INR 20,000/.
From May 23, 2023, onwards public is requested to approach the bank branches or ROs of RBI to avail of an exchange facility.
