Demonetisation again! This time Rs 2,000 notes are out of circulation

The Reserve Bank of India (RBI) has decided to withdraw Rs 2,000 notes from circulation and asked everyone to exchange them by September 30, 2023.

In a statement issued on Friday, the central bank said: “In pursuance of the “Clean Note Policy” of the Reserve Bank of India, it has been decided to withdraw ₹2000 denomination bank notes from circulation. Bank notes of ₹2000 denomination will continue to be legal tender. In order to complete the process in a time-bound manner and to provide sufficient time to the members of the public, all banks shall provide a deposit and/or exchange facility for ₹2000 notes by September 30, 2023.

RBI said, “About 89% of the ₹2000 denomination banknotes were issued before March 2017 and are at the end of their estimated life of 4-5 years. The total value of these banknotes in circulation has declined from ₹6.73 lakh crore at its peak on March 31, 2018 to ₹3.62 lakh crore, which is only 10.8% of notes in circulation as on March 31, 2023. It is also observed that this denomination is not commonly used for transactions. In addition, the stock of bank notes of other denominations remains sufficient to meet the currency requirement of the public.

Stating that the RBI has asked all banks to stop issuing Rs 2,000 notes with immediate effect, the central bank said, “In order to ensure operational convenience and avoid disruption of regular activities of bank branches, Rs 2,000 Conversion of Rs 50,000 notes into bank notes of other denominations can be made at any bank with effect from May 23, 2023, up to a limit of ₹ 20,000/- at a time.”

Currency notes of Rs 2,000 denomination were introduced in November 2016 after demonetisation of old Rs 1,000 and Rs 500 notes. According to the Reserve Bank of India, the purpose of introducing Rs 2,000 banknotes was served when currency in other denominations became available in sufficient quantity. Thus, the printing of Rs 2,000 notes was already stopped in 2018-19.

The total value of banknotes in the denominations of Rs 500 and Rs 2,000 at the end of March 2017 and at the end of March 2022 is estimated at Rs 9.512 lakh crore and Rs 27.057 lakh crore, according to the RBI’s annual report tabled before Parliament by Finance Minister Nirmala Sitharaman in March. It was Rs. ,

Banks have not been instructed not to dispense Rs 2,000 notes in ATMs. Banks make their own assessment of the amount and denomination requirement for ATMs based on past usage, consumer needs, seasonal trends, etc.