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The Reserve Bank of India (RBI) has announced the withdrawal of ₹2000 denomination banknotes from circulation, igniting public interest and inquiries regarding the rationale behind this move and its implications. This article explores critical aspects of the withdrawal, including its objectives, clean note policy, legal status, exchange limits, and the timeline for depositing or exchanging ₹2000 banknotes.
The ₹2000 denomination banknote was introduced in November 2016 under Section 24(1) of the Reserve Bank of India Act, 1934, primarily to address the currency requirements following the withdrawal of the ₹500 and ₹1000 banknotes. With the achievement of this goal and sufficient stocks of other denominations, the printing of the ₹2000 banknote was ceased in 2018-19. Most ₹2000 banknotes in circulation were issued prior to March 2017 and are nearing the end of their estimated lifespan of 4-5 years. Additionally, this denomination has not seen widespread usage in transactions, and current supplies of smaller denominations are adequate for public demand.
Consequently, in alignment with the RBI’s "Clean Note Policy," the decision was made to withdraw the ₹2000 banknote from circulation.
The Clean Note Policy, established by the RBI, ensures that members of the public have access to high-quality banknotes.
The ₹2000 banknote will continue to maintain its legal tender status, meaning it remains valid for transactions.
Members of the public can still use ₹2000 banknotes for transactions and receive them as payment; however, they are encouraged to deposit or exchange these notes by September 30, 2023.
Individuals holding ₹2000 banknotes should visit bank branches to deposit or exchange these notes. The facility for such transactions will be available until September 30, 2023, at all banks, as well as at the 19 Regional Offices of the RBI that have Issue Departments.
Deposits of ₹2000 banknotes into bank accounts can be made without limits, provided that extant Know Your Customer (KYC) norms and other applicable statutory and regulatory requirements are met.
The public can exchange ₹2000 banknotes up to a limit of ₹20,000 at a time.
Yes, ₹2000 banknotes can be exchanged through Business Correspondents (BCs) for up to ₹4,000 per day for each account holder.
The exchange facility became available from May 23, 2023, allowing individuals time to prepare for the transition.
Non-account holders can also exchange ₹2000 banknotes at any bank branch for an amount up to ₹20,000 at a time.
Individuals who need more than ₹20,000 for business or other purposes can deposit the ₹2000 banknotes into their bank accounts and later withdraw the necessary cash as needed.
The exchange facility will be provided at no cost to the public.
Banks are instructed to implement measures to minimize inconvenience for senior citizens and persons with disabilities during the deposit and exchange processes.
A window of over four months has been granted for the public to deposit or exchange ₹2000 banknotes. It is advisable for individuals to utilize this facility at their convenience within the specified time frame.
If a bank declines to accept deposits or exchanges of ₹2000 banknotes, the aggrieved customer should first contact the bank. If unresolved within 30 days, they may escalate the issue to the Reserve Bank – Integrated Ombudsman Scheme (RB-IOS), 2021, via the Complaint Management System portal of RBI (cms.rbi.org.in).
As an extension, the RBI has allowed deposits and exchanges of ₹2000 banknotes until October 07, 2023.
If individuals cannot deposit or exchange their ₹2000 banknotes by the October 07 deadline, they can still exchange them at the 19 RBI Issue Offices, subject to a limit of ₹20,000 at a time. They may also deposit these banknotes into their bank accounts, adhering to relevant RBI and Government regulations, and submit valid identification documents as required.
Individuals within the country may send ₹2000 banknotes via India Post to any of the 19 RBI Issue Offices for account credit, following the procedures outlined by the Department of Posts. This transaction will also necessitate compliance with relevant regulations.
The facility for depositing or exchanging ₹2000 banknotes will remain available at the 19 RBI Issue Offices until further notice.
The RBI's decision to withdraw ₹2000 denomination banknotes is a strategic move that follows the completion of its intended purpose and aligns with the Clean Note Policy. Although these banknotes will still be legally accepted, the public is encouraged to deposit or exchange them by September 30, 2023, for a seamless transition. The RBI has provided comprehensive guidelines, set exchange limits, and extended timelines to support this process, minimizing inconvenience to the public.