The Reserve Bank of India has decided to stop printing the Rs. 2000 banknotes, although they will still be accepted as legal cash.
It has ordered banks to immediately cease printing notes having a value of Rs 2000. While this is going on, the RBI said that up to September 30, 2023, people would still be able to deposit Rs 2000 banknotes into their bank accounts and/or exchange them for notes of other denominations at any bank branch.
The introduction of the Rs 2000 denomination banknote in November 2016 was largely to quickly address the economy's need for money after the loss of the legal tender status of all Rs 500 and Rs 1000 banknotes in use at the time.
After sufficient supplies of notes in other denominations were available, the goal of launching Rs 2000 banknotes was achieved. As a result, according to the RBI, production of Rs 2000 banknotes was discontinued in 2018–19.
A little more than 89% of the banknotes in the Rs 2000 denomination were printed before March 2017 and are nearing the end of their four to five year expected lifespan.
The entire amount of these banknotes in circulation has decreased from Rs 6.73 lakh crore, which represented 37.3% of all notes in circulation as of March 31, 2018, to Rs 3.62 lakh crore, which will make up only 10.8% of all notes in circulation on March 31, 2023.
“It has also been noted that transactions with this denomination are uncommon. Additionally, the supply of banknotes in other denominations continues to be sufficient to satisfy the public's need for cash, according to a Friday statement from the RBI.
“Starting from May 23, 2023, exchange of Rs 2000 banknotes into banknotes of other denominations can be made up to a limit of Rs 20,000 at a time at any bank, to ensure operational convenience and prevent disruption of regular activities of bank branches,” RBI said.
