India's central bank has announced that it will start withdrawing 2,000-Rupee notes from circulation, although they will remain legal tender.
People will be asked to deposit 2,000-Rupee banknotes in their bank accounts or exchange them for smaller denominations between May 23 and September 30, the Reserve Bank of India said.
They will be be able to exchange up to 20,000 Indian Rupees at a time, it added.
₹2000 Denomination Banknotes – Withdrawal from Circulation; Will continue as Legal Tenderhttps://t.co/2jjqSeDkSk— ReserveBankOfIndia (@RBI) May 19, 2023
- In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of Rs. 2,000 banknotes into banknotes of other denominations can be made up to a limit of Rs. 20,000/- at a time at any bank starting from May 23, 2023.
- To complete the exercise in a time-bound manner and to provide adequate time to the members of public, the RBI has asked all banks to provide deposit and/or exchange facility for Rs. 2,000 banknotes until September 30, 2023.
The Rs. 2,000 denomination banknote was introduced in November 2016, mainly to meet the currency requirement of the economy after the withdrawal of all Rs. 500 and Rs. 1,000 banknotes in circulation at that time.
The RBI said that the objective of introducing Rs. 2,000 banknotes was met once banknotes in other denominations became available in adequate quantities.
About 89 per cent of the Rs. 2,000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life-span of 4-5 years.
It has also been observed that this denomination is not commonly used for transactions.