In a surprise move, Reserve Bank of India (RBI) on Friday said it has been decided to withdraw two thousand Rupees denomination banknotes from circulation under the “Clean Note Policy”. The 2,000 rupee notes, however, will continue to be legal tender. RBI has said people may deposit 2,000 rupee banknotes into their bank accounts or exchange them for banknotes of other denominations at any bank branch.
The RBI added that to complete the exercise in a time-bound manner and to provide adequate time to the public, all banks shall provide deposit and/or exchange facilities for 2000 rupee banknotes until the September 30, 2023.
The move comes amid concerns of the highest denomination notes being used to hoard black money. The RBI had stopped printing Rs 2,000 notes in 2018-19 and the notes were rarely in circulation.
Talking to media, Finance Secretary TV Somanathan said, “Rs 2,000 note has served its need and it is time to move on to smaller denominations. Our aim is to encourage digital transactions. Rs 2,000 note continues as a legal tender.”
In a statement, the Central bank stated that in order to ensure operational convenience and to avoid disruption of regular activities of bank branches, the exchange of 2000 rupee banknotes into banknotes of other denominations can be made upto a limit of Rs.20,000 at a time at any bank starting from the 23rd of May, 2023. The facility will also be provided at the 19 Regional Offices of the RBI having issue departments from the 23rd of May.