The Reserve Bank of India (RBI) has provided an update on the withdrawal of ₹2,000 denomination banknotes as of October 31, 2023. The central bank’s initial goal for introducing these banknotes was to meet the currency needs of the economy after the withdrawal of ₹500 and ₹1,000 banknotes in November-December 2016. The update highlights the status of these ₹2,000 banknotes and the ongoing procedures for their exchange or deposit.
Status of ₹2,000 Banknotes Withdrawal
- More than 97% of the ₹2,000 banknotes in circulation as of May 19, 2023, have been returned by October 31, 2023.
- The remaining ₹2,000 banknotes in circulation are still considered legal tender.
Decline in ₹2,000 Banknote Value
- The total value of ₹2,000 banknotes in circulation was ₹3.56 lakh crore as of May 19, 2023.
- This value has significantly reduced to ₹10,000 crore as of October 31, 2023.
- The facility for deposit and exchange of ₹2,000 banknotes at bank branches ended on October 7, 2023.
- Starting from October 9, 2023, RBI Issue Offices are accepting these banknotes for deposit to individuals’ or entities’ bank accounts.
- The public can send ₹2,000 banknotes through India Post from any post office in the country to RBI Issue Offices for credit to their bank accounts.
- The window for deposit and exchange of ₹2,000 banknotes is still open at the 19 Issue Offices of RBI.
- The RBI encourages the public to use the India Post service to send these banknotes for deposit or exchange, eliminating the need to travel to RBI Offices.
Reason for Withdrawal
- The introduction of ₹2,000 banknotes was originally intended to meet the currency requirements after the withdrawal of ₹500 and ₹1,000 banknotes in 2016.
- Approximately 89% of the ₹2,000 banknotes were issued before March 2017 and are nearing the end of their estimated life span of 4-5 years.
- Observations indicated that this denomination was not commonly used for transactions, and there were adequate stocks of banknotes in other denominations to meet the public’s currency needs.
- In line with the “Clean Note Policy,” RBI decided to withdraw the ₹2,000 denomination banknotes from circulation on May 19, 2023.