Banks to start exchange of Rs 2000 notes on May 23

The Reserve Bank of India on Friday announced withdrawal of Rs 2,000 currency notes from circulation, and existing notes in circulation can either be deposited in bank accounts or exchanged by September 30.

The bank notes in Rs 2,000 denomination will continue to be a legal tender, the RBI said in a statement.

In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, the RBI said exchange of Rs 2,000 bank notes into bank notes 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.

The RBI has advised banks to stop issuing Rs 2,000 denomination banknotes with immediate effect.

Besides, the facility for exchange of Rs 2,000 bank notes up to the limit of Rs 20,000 at a time will be provided at the 19 Regional Offices (ROs) of the RBI having issue departments from May 23.

The Rs 2,000 denomination bank note was introduced in November 2016, primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of legal tender status of all Rs 500 and Rs 1,000 bank notes that were in circulation at that time.

Highlights

• Rs 2,000 currency notes to continue to be legal tender till September 30
• Rs 2,000 notes with public can be deposited in bank accounts or exchanged at banks and RBI's 19 Regional Offices
• Deposits of Rs 2,000 notes into bank accounts can be made without restrictions subject to compliance with extant Know Your Customer (KYC) norms and other requirements
• Public can exchange Rs 2,000 notes up to a limit of Rs 20,000 at a time beginning May 23
• Exchange of Rs 2,000 notes can be done via banking corespondents for up to Rs 4,000 per day for an account holder
• Rs 2,000 note was introduced after demonetisation in November 2016
• Unlike 2016 demonetisation, Rs 2,000 notes will continue to be a legal tender till September 30
• The withdrawal follows Rs 2,000 notes being reportedly used for hoarding black money and money laundering
• RBI had stopped printing of fresh Rs 2,000 notes since 2018-19
• About 89 per cent of the Rs 2,000 notes were issued prior to March 2017
• The total value of these bank notes in circulation declined from Rs 6.73 lakh crore at its peak as on March 31, 2018 (37.3 per cent of notes in circulation) to Rs 3.62 lakh crore (10.8 per cent of notes in circulation) as on March 31, 2023.