RBI: The Reserve Bank of India (RBI) has decided to stop issuing banknotes having a value of Rs 2,000. The central bank announced in a circular on Friday that the notes will still be accepted as legal money. The RBI has instructed banks to immediately stop issuing banknotes with a value of Rs 2,000. The central bank announced in a circular that all Rs 2,000 notes must be swapped by September 30, 2023.
Banks Obliged to Assist in Swapping Rs 2000 Notes
The RBI circular stated that until September 30, 2023, ‘all banks shall provide deposit and/or exchange facilities for Rs 2000 banknotes in order to complete the exercise in a time-bound manner and to provide adequate time for the members of the public.’ By September 30, 2023, the central bank has instructed residents to exchange their Rs 2,000 notes. Up to September 30, all banks are required to offer deposit or exchange services for notes worth Rs 2,000. The Rs 2,000 notes would still be accepted as legal money.
Banks Set Cap on Exchanging Rs 2000 Notes to Ensure Smooth Transactions
The central bank further said that beginning on May 23, any branch will accept exchanges of Rs 2,000 notes into notes of other denominations up to a cap of Rs 20,000 at a time in order to maintain operational convenience and prevent disruption of regular activities of bank branches. Following the demonetization of the previous Rs. 500 and Rs. 1,000 banknotes in November 2016, the new Rs. 2,000 currency note was released. The RBI claims that after money in other denominations was widely accessible, the goal of launching the Rs 2,000 banknotes was achieved. So, in 2018–19, production of Rs 2,000 banknotes was halted. The RBI provided an explanation for the decision, stating that “about 89% of the Rs 2000 denomination banknotes were issued prior to March 2017 and are nearing the end of their expected life-span of 4-5 years. From a peak of Rs 6.73 lakh crore on March 31, 2018 (37.3% of notes in circulation), to a low of Rs 3.62 lakh crore on March 31, 2023, or 10.8% of notes in circulation, the total value of these banknotes has decreased. Additionally, it has been noted that transactions involving this denomination are uncommon. Additionally, the supply of banknotes in other denominations is still sufficient to meet the public’s need for currency.
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