RBI to continue exchange facility for ₹2000 notes in usual manner

The Reserve Bank of India (RBI) has announced that the facility of exchanging ₹2000 banknotes across the counter will continue to be provided to the public in the same manner as before.

As per an official statement, “The facility of exchange of ₹2000 banknotes across the counter shall be provided to the public in the usual manner, that is, as was being provided earlier.”

RBI further noted that the exchange of the ₹2,000 banknotes into banknotes of other denominations can be made up to a limit of ₹20,000 at a time at any bank starting tomorrow, May 23.

The RBI had on Friday announced that ₹2000 notes will be withdrawn in pursuance of the “Clean Note Policy". The RBI also said that observations showed that ₹2000 denomination notes is not commonly used for transactions.

Earlier, RBI has advised banks to stop issuing ₹2000 denomination banknotes with immediate effect. The ₹2000 denomination banknote was introduced in November 2016 under Section 24(1) of RBI Act, 1934, primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of legal tender status of all ₹500 and ₹1000 banknotes in circulation at that time.

The ₹2,000 denomination banknote was introduced in November 2016 under Section 24(1) of the RBI Act, 1934 primarily with the objective to meet the currency requirement of the economy in an expeditious manner after withdrawal of the legal tender status of all ₹500 and ₹1,000 banknotes in circulation at that time.

With the fulfilment of that objective and the availability of banknotes in other denominations in adequate quantities, the printing of ₹2,000 banknotes was stopped in 2018-19.

The printing of ₹2000 banknotes was stopped in 2018-19. About 89% of the ₹2000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life span of 4-5 years.

The total value of these banknotes in circulation has declined from ₹6.73 lakh crore at its peak of March 31, 2018 (37.3% of Notes in Circulation) to ₹3.62 lakh crore constituting only 10.8% of Notes in Circulation on March 31, 2023.

Further, the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public, RBI said.

(With inputs from agencies)