According to data shared by the Reserve Bank of India (RBI), the total value of Rs 2,000 notes in circulation has decreased to 10.8 percent of the total as of March 31, 2023.
The RBI stated on May 19 that around 89 percent of the Rs 2,000 denomination banknotes were issued before March 2017 and have reached the end of their estimated lifespan of 4-5 years.
The value of these banknotes in circulation has declined from Rs 6.73 lakh crore at its peak on March 31, 2018 (constituting 37.3 percent of notes in circulation) to Rs 3.62 lakh crore, accounting for only 10.8 percent of notes in circulation as of March 31, 2023.
The RBI clarified that the Rs 2,000 notes are not commonly used for transactions and added that the stock of banknotes in other denominations is sufficient to meet the public’s currency requirements.
Earlier, the RBI announced its decision to withdraw Rs 2,000 notes from circulation based on a review. However, the banknotes of Rs 2,000 denomination will continue to be legal tender, as stated by the RBI.
In accordance with the “Clean Note Policy” of the RBI, the central bank decided to withdraw the Rs 2,000 denomination banknotes from circulation.
The RBI advised the public to deposit Rs 2,000 banknotes into their bank accounts or exchange them for banknotes of other denominations at any bank branch.
Deposits into bank accounts can be made in the usual manner without any restrictions, subject to existing instructions and applicable statutory provisions, as mentioned by the RBI.
To ensure convenience and avoid disruption in regular bank activities, the exchange of Rs 2,000 banknotes for banknotes of other denominations can be done up to a limit of Rs 20,000 at a time at any bank, starting from May 23, 2023.
Furthermore, the RBI has given banks ample time until September 30, 2023, to facilitate the completion of the exchange or deposit process. The central bank also advised banks to cease issuing Rs 2,000 denomination banknotes immediately.
The RBI introduced Rs 2,000 banknotes in November 2016 to meet the currency requirements of the economy after the withdrawal of the legal tender status of all Rs 500 and Rs 1,000 banknotes in circulation at that time.