The Rs 2,000 denomination bank notes which the RBI has decided to withdraw from circulation will continue to remain legal tender even after September 30, sources informed ANI.
The central bank believes that four-month time is enough for people to exchange these notes at banks. Most of the Rs 2,000 notes that are in circulation are expected to return to banks within the given time frame of 30 September. This is a routine exercise of RBI and people need not panic, the source added.
“Rs 2000 currency note will remain legal tender after 30th September too. RBI expects that 4 month time is enough for people to exchange notes with the banks. Most of the Rs 2000 notes that are in circulation will return to banks within the given time frame of 30th September. This is a routine exercise of RBI and people need not panic,” the source told ANI.
Meanwhile, the central bank has advised banks to stop issuing Rs 2000 denomination banknotes with immediate effect.
The Rs 2000 denomination banknote was introduced in November 2016, primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of the legal tender status of all Rs 500 and Rs 1000 banknotes in circulation at that time.
The objective of introducing Rs 2000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, the printing of Rs 2000 banknotes was stopped subsequently in 2018-19, stated RBI.
About 89 per cent of the Rs 2000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life span of four-five years.
The total value of these banknotes in circulation has declined from Rs 6.73 lakh crore at its peak as of March 31, 2018 (37.3 per cent of Notes in Circulation) to Rs 3.62 lakh crore constituting only 10.8 per cent 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 Friday.
It added, “In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of Rs 2000 banknotes into banknotes of other denominations can be made upto a limit of Rs 20,000 at a time at any bank starting from May 23, 2023”.