The Reserve Bank of India (RBI) has decided to withdraw Rs 2,000 notes from circulation. However, the existing notes will continue as legal tenders, the RBI announced on Friday.
The central bank has advised the public to deposit banknotes of Rs 2,000, which were introduced six years ago after withdrawing Rs 500 and Rs 1,000 notes during the demonetization exercise, to be exchanged in their bank accounts and/or banknotes of other denominations at another bank sector.
Why has the RBI withdrawn Rs 2000 notes?
The Rs 2000 note was introduced in November 2016 under Section 24(1) of the RBI Act, 1934, with the aim of meeting the currency requirement of the economy quickly after withdrawing the legal tender status of Rs 500 and Rs 1,000 notes. As soon as that purpose was met and notes of other denominations were available in sufficient quantities, the printing of Rs 2,000 notes stopped in 2018-19.
The RBI had issued most of the Rs 2,000 notes before March 2017; These notes are now at the end of their estimated lifespan of 4-5 years. These values are no longer commonly used for transactions; Also, there is enough stock of notes of other values to meet the currency requirements.
“In view of the above, and in line with the ‘Clean Note Policy’ of the Reserve Bank of India, it has been decided to withdraw Rs 2,000 notes from circulation,” the RBI said.
