The Reserve Bank of India (RBI) stated on Friday that its biggest denomination note, the Rs 2,000, will no longer be in use but said that the notes would still be accepted as legal cash. Until September 30, current Rs 2,000 notes can be deposited or exchanged in banks, however a cap of “Rs 20,000 at a time” was imposed.
When the Rs 500 and Rs 1,000 notes were removed in November 2016 as part of demonetisation, the central bank urged the people to deposit the new Rs 2,000 notes into their bank accounts or exchange them for notes of other denominations at any bank branch. Additionally, it instructed banks to immediately stop printing Rs 2,000 notes.
“Rs 2,000 banknotes can be exchanged up to a limit of Rs 20,000 at a time, at any bank, beginning May 23, to ensure operational convenience and prevent disruption of regular activities of bank branches,” it stated.
The statement read, “Until September 30, 2023, all banks shall provide deposit and/or exchange facility for Rs 2,000 banknotes in order to complete the exercise in a time-bound manner and to afford adequate time to the members of the public.”
The RBI stated that deposits “can be made into bank accounts in the usual manner, that is, without restrictions and subject to extant instructions and other applicable statutory provisions.”
Starting on May 23, the 19 regional offices of the RBI with issue divisions will additionally provide the ability to swap notes worth Rs 2,000 up to a maximum of Rs 20,000 at a time.
When reached by The Indian Express an hour after the announcement, a top Reserve Bank of India official said: “This is a standard process and the Government carried out a similar withdrawal of currency notes that had been issued before 2005 in 2013-2014. Therefore, nothing more should be inferred from this decision this time around. Other nations, including the United States, occasionally act in this manner.
The RBI estimates that 89% of the Rs 2,000 denomination notes were printed before March 2017 and are nearing the end of their four- to five-year expected lifespan. “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,” the statement read.
Similar efforts to remove notes from circulation were made by the RBI in 2013–2014.
