The Reserve Bank of India (RBI) has announced its decision to withdraw the ₹2000 denomination banknotes from circulation. However, it's important to note that these banknotes will continue to remain legal tender. The move comes as part of the RBI's efforts to streamline the currency system and maintain an efficient flow of money within the economy.
The ₹2000 banknotes were introduced in November 2016 following the demonetization of the ₹500 and ₹1000 banknotes. This decision was made under Section 24(1) of the RBI Act, 1934, to quickly meet the currency requirements of the economy during that period. However, as the RBI stated, the objective of introducing these banknotes has been fulfilled since an adequate quantity of banknotes in other denominations are now available.
It is worth mentioning that the printing of ₹2000 banknotes was halted in 2018-19. Approximately 89% of the ₹2000 denomination banknotes were issued prior to March 2017, and they have reached the end of their estimated life span of 4-5 years. As a result, the total value of these banknotes in circulation has significantly declined from its peak of ₹6.73 lakh crore as of March 31, 2018, to ₹3.62 lakh crore, constituting only 10.8% of the total notes in circulation as of March 31, 2023. Moreover, it has been observed that the ₹2000 denomination is not commonly used for everyday transactions.
Q What does it mean that the ₹2000 banknotes will continue to be legal tender?
A Legal tender refers to the official currency recognized by the government as a means of settling financial obligations. In the case of the ₹2000 banknotes, they can still be used for transactions and are accepted as a form of payment by businesses and individuals.
Q Can I still deposit my ₹2000 banknotes?
A Yes, you can still deposit your ₹2000 banknotes. The Reserve Bank of India (RBI) has instructed all banks to provide deposit facilities for ₹2000 banknotes until September 30, 2023.
Q When can I deposit my ₹2000 banknotes?
A The RBI has set a deadline of September 30, 2023, for the deposit of ₹2000 banknotes. You can visit any bank branch and complete the deposit transaction before this specified date.
Q Is there any limit on the amount of ₹2000 banknotes I can deposit?
A The RBI has not specified any limit on the amount of ₹2000 banknotes that can be deposited. You can deposit any quantity of ₹2000 banknotes as per your requirement without any restrictions subject to compliance with extant Know Your Customer (KYC) norms and other applicable statutory / regulatory requirements.
Q Can I exchange my ₹2000 banknotes for other denominations?
A Yes, you can exchange your ₹2000 banknotes for banknotes of other denominations. However, there is a limit of ₹20,000/- per transaction for the exchange of ₹2000 banknotes into banknotes of other denominations. This limit is set to ensure operational convenience and to avoid disruption of regular activities at bank branches. The exchange facility will be available at any bank starting from May 23, 2023.
Additionally, the facility for exchange of ₹2,000 bank notes up to the limit of ₹20,000 at a time will be provided at the 19 Regional Offices of the RBI having issue departments from May 23.
Q Is it necessary to be a customer of the bank to exchange ₹2000 banknotes from its branches?
A No. A non-account holder also can exchange ₹2000 banknotes up to a limit of ₹20,000/- at a time at any bank branch.
This Article was authored by Tushant a passionate blogger by .
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