Reserve Bank of India on Friday has decided to withdraw Rs 2,000 bank note from circulation. However, RBI said bank notes of Rs 2,000 denomination will continue to be legal tender.
Reserve Bank of India explained the rationale behind the move being “banknotes in other denominations are available in adequate quantities”.
RBI said these notes are to be exchanged at banks on or before September 30, 2023.
“Members of the public can continue to use Rs 2,000 banknotes for their transactions and also receive them in payment. However, they are encouraged to deposit and/or exchange these notes on or before September 30, 2023,” said RBI.
“About 89% of the Rs 2,000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life-span of 4-5 years. 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.
It has also been observed that this denomination is not commonly used for transactions. Further, the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public,” RBI said in a statement.