Rs 2000 denomination bank notes being withdrawn, The ₹2000 denomination banknote was introduced in November 2016 under Section 24(1) of RBI Act, 1934, primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of legal tender status of all ₹500 and ₹1000 banknotes in circulation at that time.
Why are Rs 2000 denomination banknotes being withdrawn?
The 22000 denomination banknote was introduced in November 2016 under Section 24(1) of RBI Act, 1934 primarily with the objective to meet the currency requirement of the economy in an expeditious manner after withdrawal of the legal tender status of all 500 and 21000 bank notes incirculation at that time.
With fulfilment of that objective and availability of banknotes in other denominations in adequate quantities, printing of 32000 banknotes was stopped in 2018-19. A ‘majority of the ₹ 2000 denomination notes were issued prior to March 2017 and are at the end of their estimated life-span of 4-5 years.
It has also been observed that this denomination is not commonly used for transactions. Further, the stock of banknotes in other denominations continue to be adequate to meet the currency requirement of the public.
In view of the above, and in pursuance of the ‘Clean Note Policy” of the Reserve Bank of India, it has been decided to withdraw the 22000 denomination banknotes from circulation.
What is Clean Note Policy?
It is a policy adopted by RBI to ensure availability of good quality banknotes to the members of public.
Does the legal tender status of 2000 banknotes remain?
Yes. The ₹ 2000 banknote will continue to maintain its legal tender status.
Can 2000 banknotes be used for normal transactions?
Yes. Members of the public can continue to use 2000 banknotes for their transactions and also receive them in payment. However, they are encouraged to deposit and/or exchange these banknotes on or before September 30, 2023.
What should the public do with the 2000 denomination banknotes held by them?
Members of the public may approach bank branches for deposit and/or exchange of *2000 banknotes held by them. The facility for deposit into accounts and exchange for *2000 banknotes will be available at all banks until September 30, 2023. The facility for exchange will be available also at the 19 Regional Offices (ROS) of RBI having Issue Departments until September 30, 2023.
Is there a limit on deposit of 2000 banknotes into a bank account?
Deposit into bank accounts can be made without restrictions subject to compliance with extant know Your Customer (KYC) norms and other applicable statutory / regulatory requirements.
What is Windfall Tax, which the Indian government has abolished in 2023?
Is there an operational limit on the amount of 2000 banknotes that can be exchanged?
Members of the public can exchange 2000 banknotes upto to a limit of ₹20,000/- at a time.
Can 2000 banknotes be exchanged through Business Correspondents (BCs)?
Yes, exchange of 2000 banknotes can be made through BCs upto a limit of 4000/- per day for an account holder.
From which date will the exchange facility be available?
To give time to the banks to make preparatory arrangements, members of the public are requested to approach the bank branches or ROS of RBI from May 23, 2023 for availing exchange facility.
Is it necessary to be a customer of the bank to exchange 2000 banknotes from its branches?
No. A non-account holder also can exchange 2000 banknotes up to a limit of Rs. 20,000/- at a time at any bank branch.
Source of Information: RBI Official
