The Reserve Bank of India (RBI) announced the withdrawal of the Rs 2,000 banknote from circulation with the public being “urged” to deposit or exchange the notes at bank branches until September 30, 2023. The central bank further insisted that these notes will continue to be accepted as legal tender after September 30.
The action was taken more than six years after the introduction of the Rs 2,000 notes into the system and the demonetization of the Rs 1,000 and the previous Rs 500 notes in November 2016 to meet the urgent requirement at the time.
The rationale for withdrawal was attributed to the banknotes' low usage and the fact that they were nearing the end of their four- to five-year lifespan. “In accordance with the RBI’s ‘Clean note policy’, the decision to withdraw the Rs 2,000 banknotes has been made,” RBI said in a statement.
Those holding ₹ 2,000 notes can deposit them into bank accounts, following the usual procedures and subject to applicable rules. Those wanting to exchange them can only do so up to a limit of ₹ 20,000 at a time, starting from May 23, 2023, at any bank branch.
People should not panic and rush to return or exchange their ₹ 2,000 currency notes, RBI governor Shaktikanta Das said, a day before banks across India start the process of taking back the high-value notes. Even after September 30, the notes would continue to be legal, he asserted.
Under Section 24(1) of The RBI Act, 1934, the Rs 2000 note was established with the primary goal of quickly addressing the economy's need for money when the Rs 500 and Rs 1000 notes lost their legal tender validity. With the fulfilment of that objective, and once notes of other denominations were available in adequate quantities, the printing of Rs 2000 notes was stopped in 2018-19.