Understanding RBI’s Move: Major Takeaways from ₹2,000 Note Withdrawal

New Delhi: The Reserve Bank of India (RBI) on Friday made an announcement regarding the withdrawal of Rs 2,000 currency notes from circulation. Here are the key highlights of the announcement:

1. Legal Tender: The Rs 2,000 currency notes will remain legal tender until September 30.

2. Deposits and Exchanges: Individuals can deposit their Rs 2,000 notes into bank accounts or exchange them at banks and RBI’s 19 Regional Offices.

3. Deposit Restrictions: There are no restrictions on depositing Rs 2,000 notes into bank accounts, as long as the depositor complies with the existing Know Your Customer (KYC) norms and other requirements.

4. Exchange Limit: From May 23 onwards, the public can exchange Rs 2,000 notes up to a limit of Rs 20,000 at a time.

5. Banking Correspondents: Account holders can also exchange Rs 2,000 notes through banking correspondents, with a daily limit of Rs 4,000.

6. Demonetization Context: The Rs 2,000 note was introduced following the demonetization in November 2016.

7. Legal Tender Continuation: In contrast to the 2016 demonetization, the Rs 2,000 notes will continue to be legal tender until September 30.

8. Reason for Withdrawal: The withdrawal decision was prompted by reports of Rs 2,000 notes being used for hoarding black money and money laundering.

9. Printing Halt: RBI had ceased the printing of fresh Rs 2,000 notes since 2018-19.

10. Circulation Statistics: About 89 percent of the Rs 2,000 notes were issued prior to March 2017. The total value of these notes in circulation declined from Rs 6.73 lakh crore (37.3 percent of total notes) as of March 31, 2018, to Rs 3.62 lakh crore (10.8 percent of total notes) as of March 31, 2023.