The provision for depositing or exchanging the ₹2000 notes with the banks issued by the Reserve Bank of India four months ago will end today, which is September 30, 2023. It was on May 19, this year, that the RBI issued a press release stating the same. The public, whether an account holder or otherwise, can get the facility of exchange done through all bank branches or regional branches. The upper limit of exchange is kept at 10 notes at a time, and no extra cost is incurred on the exchange by the banks. Furthermore, the exchange policy requires no ID card verification. Failing to do the exchange prior to September 30th, all ₹2000 notes in circulation will be converted to valueless pieces of paper inadequate for general transactions.
The Central Bank of India, RBI, introduced the 2000-denomination notes on November 8, 2016 under Section 24(1) of the RBI Act, 1934. It was on the same day that the historic announcement of the demonetization of denominations of 500 and 1000 was made. The aim of introducing the ₹2000 notes, as claimed by the Indian Government, was to meet the currency requirement after the withdrawal of the legal tender status of all ₹500 and ₹1000 notes, along with curbing corruption, black money, and fake notes as part of the government’s demonetization policy. New currency in denominations of 500, 200, 100, 50, 20, and 10 was also introduced by the RBI over and above the ₹2000 notes.
Reason for Withdrawal of ₹2000
According to an official press release by the RBI on May 19, about 89 percent of the ₹2000 notes were issued before March 2017. The gross value of these notes in circulation has also declined significantly. People seldom use the 2000-denomination notes for transactions, and the stocks of other lower-denomination notes are adequately available to meet their currency requirements. It was according to these data and in consonance with the ‘Clean Note Policy’ of the RBI that the denomination of ₹2000 notes was withdrawn from circulation. As per this press release, close to 93 percent of the notes that were in circulation have been returned to banks.
What happens to ₹2000 after September 30?
On May 21st, ‘MyGovIndia’ through its official X account (previously Twitter) posted, “Yes! The ₹2000 notes will continue to be legal tender even after September 30, 2023. Your currency remains valid, so keep calm and let’s bust the panic!”
As announced by the RBI, the last date to exchange the note with any bank is September 30. After that, the notes will not be accepted by banks for transaction purposes. Only the RBI will have the authority to exchange these withdrawn notes. The status of the notes remains legal tender.
It is to be noted here that the withdrawal of currency in circulation is not the same as the withdrawal of the legal tender status of currency in circulation, i.e., demonetization. The objectives for which the ₹2000 note was introduced are considered fulfilled by Indian policymakers. The printing of ₹2000 notes was stopped long ago, in 2018. The sustained fall in the use of this high-denomination note among the public, in addition to ever-expanding UPI and digital payments, has made the withdrawal of ₹2000 notes the next step as part of its financial policies.