Rs 2,000 notes will be out of circulation, chance to change notes till September

The Reserve Bank of India (RBI) on Friday announced the withdrawal of Rs 2,000 notes from circulation. However, notes of this denomination can be deposited or exchanged in banks till September 30. In a statement issued in the evening, the RBI said that Rs 2,000 notes currently in circulation will continue to be legal tender till September 30. Along with this, RBI has asked banks to stop giving Rs 2,000 notes with immediate effect. It has asked the banks to provide the facility of depositing and exchanging these notes till 30 September.

From May 23, Rs 2,000 notes can be exchanged and deposited in banks. However, only notes worth Rs 20,000 will be exchanged at a time. However, the RBI has not specified the maximum denomination of Rs 2,000 notes that a person can deposit in banks. But he has said that only a maximum of 10 notes can be changed at a time. This move of RBI is slightly different from the unexpected announcement of November 2016, in which the then notes of 500 and 1,000 rupees were taken out of circulation from the midnight of the announcement.

At the same time RBI had issued Rs 2,000 notes. The central bank, however, did not specify what would be the status of Rs 2,000 notes left with people after the September 30 deadline. According to sources, even after the expiry of the deadline, if people keep these notes with them, then no legal action will be taken against them. Speaking to a TV channel after the decision was announced, Finance Secretary T V Somanathan said that the decision is different from demonetisation in November 2016 and will not have any impact on the economy.

When asked about the notes not being deposited till September 30, he said that banks will have proper arrangements to deal with it. At the same time, former Finance Secretary SC Garg said that the purpose of this move of RBI is to reduce the dependence on high value notes and to promote digital payments. He said that half of the Rs 2,000 notes are already out of the financial system. The central bank has taken this step amid concerns about high denomination notes being used to hoard black money.

The RBI had stopped printing new Rs 2,000 notes in the financial year 2018-19 itself and gradually their circulation has reduced considerably. According to the Reserve Bank, it has been observed that Rs 2,000 denomination notes are no longer commonly used for transactions. Along with this, due to the availability of notes of other denominations in sufficient quantity with the banks, there will be no problem in giving notes to the people. Keeping this in mind, it has been decided to withdraw Rs 2,000 denomination notes from circulation in line with RBI’s clean note policy, RBI said.

However, bank notes of Rs 2,000 denomination will continue to be legal tender. The central bank has asked people to visit banks to deposit Rs 2,000 notes in their accounts or exchange them for notes of other denominations. People can exchange notes from May 23 to September 30 by visiting any bank branch. Apart from this, 19 regional offices of RBI will also be given the facility to exchange Rs 2,000 notes.

According to the RBI, around 89 per cent of the Rs 2,000 notes were issued before March 2017 and are nearing the end of their estimated life of four-five years. Rs 2,000 notes worth Rs 6.73 lakh crore were present in circulation in March 2018 but their number has come down to Rs 3.62 lakh crore in March 2023. Thus, only 10.8 per cent of the total notes in circulation are Rs 2,000 notes, which was 37.3 per cent in March 2018.

Disclaimer:IndiaTheNews has not edited this news. This news has been published from PTI-language feed.

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