2. The Reserve Bank of India has decided to withdraw INR
2,000 notes from circulation in pursuance of the central
bank’s Clean Note Policy.
The RBI has said banknotes in INR 2,000 denomination
will continue to be legal tender, which implies a consumer
can purchase goods using the currency.
The INR 2,000 denomination banknotes were introduced
in 2016 under Section 24 (1) of the RBI Act, 1934, after the
withdrawal of legal tender status of all INR 500 and INR
1,000 banknotes in circulation at that time.to make sure
that enough of money is available
3. The RBI said in a press statement that the objective of
introducing INR 2,000 banknotes was met once
banknotes in other denominations became available in
adequate quantities. Therefore, printing of INR 2,000
banknotes was stopped in 2018-19.
4. Statistics report
the total value of these banknotes,
which are in circulation and are
issued prior to March 2017, has
declined from INR 6.73 lakh cr at its
peak as on March 31, 2018 to INR
3.62 lakh cr constituting only 10.8%
of notes in circulation on March 31,
2023. It points to the fact that the
INR 2,000 notes have reached the
end of their life span of four to five
years.
5. You can deposit your INR 2,000 banknote into your bank account and/or
exchange them into banknotes of other denominations at any bank branch.
Deposit into bank accounts can be made in the usual manner, that is,
without restrictions and subject to applicable provisions.
The exchange of INR 2,000 banknotes into banknotes of other denominations
can be made up to a limit of INR 20,000/- at a time at any bank starting from
May 23, 2023. All banks will provide deposit and/or exchange facility for INR
2,000 banknotes until September 30, 2023.
Citizens can utilize time up to September 30, 2023 to deposit and/or
exchange the INR 2,000 banknotes.
6. The government’s call to deposit or exchange the notes for smaller denominations
by Sept. 30 is likely to lead to a rise in bank deposits.
help improve liquidity in the banking system. Importantly, this comes at a time
when deposit growth is lagging bank credit growth.
Improved liquidity in the banking system and inflow of deposits into banks could
lead to a drop-in short-term interest rates as these funds get invested in shorter-
term government securities.
7. The RBI outlined that the INR 2,000 denomination is not
commonly used for transactions and the stock of banknotes
in other denominations continues to be adequate to meet the
currency requirement of the country.
