Why RBI has withdrawn Rs 2,000 notes, what you should do with yours

Why are the Rs 2000 denomination banknotes being withdrawn?

According to the RBI, the Rs 2000 denomination banknote was introduced in November 2016 “primarily with the objective to meet the currency requirement of the economy in an expeditious manner after withdrawal of the legal tender status of all Rs 500 and Rs 1000 banknotes in circulation at that time.”

With fulfilment of that objective and availability of banknotes in other denominations in adequate quantities, printing of Rs 2000 banknotes was stopped in 2018-19. A majority of the Rs 2000 denomination notes were issued prior to March 2017 and are currently at the end of their estimated life-span of 4-5 years.

The RBI has observed that this denomination is not commonly used for transactions. Further, the stock of banknotes in other denominations continue to be adequate to meet the currency requirement of the public.

In view of the above, and in pursuance of the “Clean Note Policy” – a policy adopted by RBI to ensure availability of good quality banknotes to the members of public – the central bank decided to withdraw the Rs 2000 denomination banknotes from circulation.

What should you do your Rs 2000 denomination banknotes?

Members of the public may approach bank branches for deposit and/or exchange of Rs 2000 banknotes held by them. The facility for deposit into accounts and exchange for Rs 2000 banknotes will be available at all banks starting on May 23, 2023 until September 30, 2023.

The facility for exchange will be available also at the 19 Regional Offices (ROs) of RBI having Issue Departments until September 30, 2023.

Banks have also been instructed to make arrangements to reduce inconvenience to the senior citizens, persons with disabilities, etc., seeking to exchange/deposit Rs 2000 banknotes.

Is there a limit on the exchange of the notes to your bank account?

Deposit into bank accounts can be made without restrictions subject to compliance with extant Know Your Customer (KYC) norms and other applicable statutory / regulatory requirements.

However, at a time, you can only exchange Rs 2000 banknotes upto to a limit of Rs 20,000 – 10 banknotes at a time.

Is there are also a limit on the amount that can be deposited?

No. Deposit into accounts can be made without restrictions. The Rs 2000 banknotes can be deposited into bank accounts and cash requirements can be drawn thereafter, against these deposits.

Can non-account holders also exchange?

Even non-account holders can exchange Rs 2000 banknotes up to a limit of Rs 20,000/- at a time at any bank branch.

If a bank refuses, grievances must be officially registered with the concerned bank. If the bank does not respond within a period of 30 days after lodging of the complaint or if the complainant is not satisfied
with the response/resolution given by the bank, the complainant can then lodge a complaint under the Reserve Bank – Integrated Ombudsman Scheme (RB-IOS), 2021 at the Complaint Management System portal of RBI (cms.rbi.org.in).

But can you still use the notes?

Yes. The Rs 2000 banknote will continue to maintain its legal tender status. Members of the public can continue to use Rs 2000 banknotes for their transactions and also receive them in payment.

However, as per the RBI, they are encouraged to deposit and/or exchange these banknotes on or before September 30, 2023.