What will happen to ₹2000 notes after September 30?
The latest RBI decision impacts just about 11% of currency in circulation and therefore will probably trigger little chaos, according to Bloomberg.
Clarifying the possible confusion regarding the status of the ₹2000 banknotes, the Reserve Bank of India (RBI) has confirmed that the high-denomination notes will maintain their legal tender status even after September 30, 2023. According to the RBI's Frequently Asked Questions (FAQs), the public can continue to use ₹2000 banknotes for normal transactions. Individuals can accept them as payment or utilize them for their own transactions without any restrictions.
However, the RBI encourages the public to deposit and/or exchange their ₹2000 banknotes on or before September 30, 2023.
“ ₹2000 currency note will remain legal tender after 30th September too. RBI expects that 4 month time is enough for people to exchange notes with the banks. Most of the ₹2000 notes that are in circulation will return to banks within the given time frame of 30th September. This is a routine exercise of RBI and people need not panic,” ANI quoted people familiar with the matter.
To facilitate the process, the central bank has advised the public to approach their respective bank branches after May 23, 2023, for depositing and/or exchanging the ₹2000 denomination banknotes they hold. The facility for depositing into accounts and exchanging for ₹2000 banknotes will be available at all banks until September 30, 2023.
Additionally, the exchange facility will be extended to the 19 Regional Offices (ROs) of the RBI having Issue Departments until the same deadline.
While the RBI did not specify a limit for depositing the ₹2,000 currency notes in bank accounts, exchange of a maximum of ₹20,000 (10 notes of ₹2,000) for other currency notes will be allowed at a time.
The move comes amid concerns about the highest denomination notes being used to hoard black money.
The ₹2,000 denomination banknote was introduced in November 2016, primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of the legal tender status of all ₹500 and ₹1,000 banknotes in circulation at that time. The RBI had stopped printing ₹2,000 notes in 2018-19 and the notes were rarely in circulation.
The RBI said it has also been observed that the ₹2,000 denomination note is not commonly used for transactions. Further, the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public, it added.
"In view of the above, and in pursuance of the 'Clean Note Policy' of the Reserve Bank of India, it has been decided to withdraw the ₹2,000 denomination bank notes from circulation," the RBI said.
(With PTI inputs)
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