RBI Withdraws Rs 2000 Note from Circulation, Remains Legal Tender; Exchange Facility Available

19-05-2023 : The Rs 2000 banknotes will no longer be in circulation, but they will continue to be accepted as legal tender according to a decision taken by the Reserve Bank of India (RBI). This action is being taken as the RBI urges banks to stop issuing Rs. 2000 banknotes right away. However, until September 30, 2023, people will still be able to deposit these banknotes into their accounts or exchange them for banknotes of different denominations at any bank location.

The introduction of the Rs 2000 banknote took place in November 2016, with the primary aim of swiftly meeting the currency requirements of the economy following the withdrawal of the legal tender status of all Rs 500 and Rs 1000 banknotes. Once an adequate quantity of banknotes in other denominations became available, the objective of introducing the Rs 2000 banknotes was achieved. Consequently, the printing of these banknotes was discontinued in 2018-19, according to the RBI.

Approximately 89 percent of the Rs 2000 banknotes were issued prior to March 2017 and have reached their estimated lifespan of four to five years. The total value of these banknotes in circulation has decreased from its peak of Rs 6.73 lakh crore as of March 31, 2018 (accounting for 37.3 percent of the total notes in circulation) to Rs 3.62 lakh crore, representing only 10.8 percent of the total notes in circulation as of March 31, 2023. The RBI stated that this denomination is not commonly used for transactions and that an adequate stock of banknotes in other denominations remains available to meet the public’s currency requirements.

To ensure operational convenience and minimize disruptions to regular banking activities, the RBI has implemented a limit of Rs 20,000 for the exchange of Rs 2000 banknotes into banknotes of other denominations. This exchange facility will be available at any bank starting from May 23, 2023.