Demonetisation 2.0? Why RBI withdrawing Rs 2,000 Notes, Is it Like 2016 Note Ban

The Reserve Bank of India (RBI) announced on Friday that it would stop issuing currency notes of Rs 2,000. However, according to a press release from the Reserve bank of India, the notes will still be accepted as legal tender.

As per RBI Press Release the Rs. 2000 denomination banknote was introduced in Nov, 2016 to meet the currency requirement of the economy after the withdrawal of Rs. 500 and Rs. 1000 banknotes. However, the printing of Rs. 2000 banknotes was stopped in 2018-19 as banknotes in other denominations became available in adequate quantities.

As per Press Release total value of Rs. 2000 banknotes in circulation has declined from ₹6.73 lakh crore at its peak as on March 31, 2018 (37.3% of Notes in Circulation) to ₹3.62 lakh crore constituting only 10.8% of Notes in Circulation on March 31, 2023. Additionally, it has been noted that transactions involving Rs. 2000 Notes denominations are uncommon. Additionally, the supply of banknotes in other denominations is still sufficient to meet the public’s demand for currency.

According to RBI Press Release in pursuance of the “Clean Note Policy” of the Reserve Bank of India, it has been decided to withdraw the ₹2000 denomination banknotes from circulation. However, the banknotes in ₹2000 denomination will continue to be legal tender and can be deposited in banks or exchanged at RBI offices till September 30, 2023.

After this date, they will no longer be legal tender and will not be accepted by banks or RBI offices.

Here are some additional details about the withdrawal of ₹2000 denomination banknotes:

• The withdrawal of ₹2000 denomination banknotes is a gradual process and will be completed in a phased manner.
• The public will be given adequate time to deposit or exchange their ₹2000 denomination banknotes i.e till Sep 30 Anybody can deposit or exchange Rs. 2000 Notes.