Author: Chandan Vishwakarma
The Reserve Bank of India (RBI) has announced to withdraw the ₹2000 denomination banknotes from circulation. However, the ₹2000 notes will continue to be legal tender until September 30, 2023. The RBI has asked banks to provide deposit and/or exchange facility for ₹2000 notes until then. The RBI said that the ₹2000 notes were introduced in November 2016 after demonetisation, but they are no longer needed as other denominations are available in adequate quantities. The RBI also said that about 89% of the ₹2000 notes were issued before March 2017 and are at the end of their estimated life-span of 4-5 years. The printing of ₹2000 notes was stopped in 2018-19.
When & why ₹2000 banknotes was introduced
On November 8, 2016, the Government of India announced the demonetisation of all ₹500 and ₹1,000 banknotes of the Mahatma Gandhi Series which was popularly known as “Note Bandi”. It also announced the issuance of new ₹500 and ₹2000 banknotes in exchange for the demonetised banknotes. Prime Minister Narendra Modi claimed that the action would curtail the shadow economy, increase cashless transactions, and reduce the use of illicit and counterfeit cash to fund illegal activity and terrorism.
The demonetisation had a significant impact on the Indian economy. In the immediate aftermath of the announcement, there were long queues outside banks and ATMs as people rushed to exchange their old notes for new ones. This led to a shortage of cash in circulation, which disrupted economic activity.
When & why RBI stopped printing the ₹2000 banknotes in India
The Reserve Bank of India (RBI) stopped printing the ₹2000 banknotes in India in 2018-19. The decision was taken after the RBI had achieved its objective of meeting the currency requirement of the economy in an expeditious manner after the withdrawal of the legal tender status of all Rs. 500 and Rs. 1000 banknotes in circulation at that time.
Reason behind demonetisation of ₹2000
The Reserve Bank of India (RBI) has decided to withdraw the ₹2000 denomination banknotes from circulation. The decision was taken in view of the 'Clean Note Policy' of the RBI, which aims to ensure availability of good quality banknotes to the members of public. The ₹2000 banknote will continue to maintain its legal tender status and members of the public can continue to use it for their transactions and also receive it in payment. However, they are encouraged to deposit and/or exchange these banknotes on or before September 30, 2023.
The RBI has advised banks to stop issuing ₹2000 denomination banknotes with immediate effect. The public can deposit the ₹2000 banknotes at any bank branch or exchange them for notes of smaller denominations up to ₹20000 at a time. After September 30, 2023, the ₹2000 banknotes will no longer be legal tender and will not be accepted by banks or any other financial institution.
The withdrawal of the ₹2000 banknotes is a significant step by the RBI in its efforts to curb counterfeiting and improve the quality of currency in circulation. It is also expected to make it easier for the government to track and trace the movement of money, which could help in the fight against corruption and other financial crimes.
Here are some of the key points to note about the withdrawal of the ₹2000 banknotes:
- The RBI had achieved its objective of meeting the currency requirement of the economy in an expeditious manner after the withdrawal of the legal tender status of all Rs. 500 and Rs. 1000 banknotes in circulation.
- The Rs. 2000 banknotes were introduced in November 2016 and had an estimated life-span of 4-5 years.
- The RBI had started printing the new Rs. 500 and Rs. 200 banknotes in adequate quantities to meet the currency requirement of the economy.
The ₹2000 banknote will remain legal tender until September 30, 2023.