Economy

Published: May 20, 2023
Updated: May 20, 2023

RBI to Withdraw Rs 2,000 Currency Notes: Here's What You Need to Know

In a recent announcement, the Reserve Bank of India (RBI) stated that it will be withdrawing the circulation of Rs 2,000 denomination banknotes. However, it emphasized that the existing Rs 2,000 notes will remain legal tender. To ensure a smooth transition, the RBI has provided details and clarifications regarding this decision.

Reasons for Withdrawal

The introduction of the Rs 2,000 banknote in 2016 aimed to meet the immediate currency demand after the withdrawal of Rs 500 and Rs 1,000 notes. With the fulfillment of this objective and sufficient availability of other denominations, the printing of Rs 2,000 notes ceased in 2018-19. Since a majority of these notes were issued prior to March 2017 and are nearing their estimated life span of 4-5 years, and considering that this denomination is not commonly used for transactions, the RBI has decided to withdraw them.

Clean Note Policy and Legal Tender Status

The withdrawal of the Rs 2,000 notes aligns with the RBI's Clean Note Policy, which ensures the circulation of good quality banknotes. Despite their withdrawal, the legal tender status of the Rs 2,000 notes remains unchanged. Individuals can continue to use them for transactions and accept them as payment. However, the RBI encourages depositing and/or exchanging these banknotes before September 30, 2023.

Exchange and Deposit Process

For the convenience of the public, individuals can approach bank branches to deposit or exchange their Rs 2,000 notes. This facility will be available until September 30, 2023. The exchange service will also be provided at the 19 Regional Offices (ROs) of RBI. There is no restriction on depositing Rs 2,000 notes into bank accounts, subject to compliance with Know Your Customer (KYC) norms.

Limits and Fee

The exchange of Rs 2,000 notes is limited to Rs 20,000 at a time for individuals. Business Correspondents (BCs) can facilitate exchanges up to Rs 4,000 per day for account holders. The exchange facility will be free of cost, and no fee is required. Banks have been instructed to make arrangements to assist senior citizens, persons with disabilities, and others who may require special assistance.

Timeframe and Grievance Redressal

To ensure a seamless process, the RBI has provided over four months for individuals to deposit or exchange their Rs 2,000 notes. In case of any issues, individuals can approach the concerned bank and, if needed, escalate their complaint through the Reserve Bank - Integrated Ombudsman Scheme (RB-IOS), 2021.

The RBI's decision to withdraw Rs 2,000 currency notes aims to streamline currency circulation and ensure the availability of good quality banknotes. Individuals are advised to take advantage of the deposit and exchange facilities within the given timeframe. The RBI is committed to addressing any grievances and providing a smooth transition process for the public.