MC Explains | What to do with your Rs 2,000 currency notes?

About 89 percent of the Rs 2,000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated lifespan of 4-5 years.

The process of depositing or exchanging the note will start on May 23. To ensure operational convenience and to avoid disruption of regular activities, the exchange of Rs 2,000 notes would be limited to Rs 20,000 at a time at any bank branch and some designated RBI offices.

The Reserve Bank of India (RBI) on May 19 said it is withdrawing Rs 2,000 notes from circulation. The central bank also advised banks to stop issuing Rs 2,000 denomination banknotes with immediate effect.

However, the banknotes in Rs 2,000 denomination will continue to be legal tender, the RBI said in a release. The RBI has advised public to deposit Rs 2,000 banknotes into their bank accounts or exchange them for banknotes of other denominations at any bank branch.

Here are the most common questions answered for the people having Rs 2,000 banknotes kept at home for emergency or in business for regular transactions.

Why are Rs 2,000 denomination banknotes being withdrawn?

The Rs 2,000 denomination banknote was introduced in November 2016, primarily with the objective of meeting the currency requirement of the economy expeditiously after demonetisation of all Rs 500 and Rs 1,000 banknotes in circulation at that time. A majority of the Rs 2,000 denomination notes were issued prior to March 2017 and are at the end of their estimated life-span of 4-5 years. The printing of Rs 2,000 banknotes was stopped in 2018-19. The Reserve Bank of India has observed, that this denomination is not commonly used for transactions.

In view of the above-discussed points, the RBI has decided to withdraw the Rs 2,000 denomination banknotes from circulation.

Can I use the Rs 2,000 banknotes in my regular transactions after this announcement from RBI?

The Rs 2,000 banknote will continue to maintain its legal tender status. So, you can continue to use Rs 2,000 banknotes for your regular transactions and also accept them in payment. However, the RBI encourages to deposit and/or exchange these banknotes on or before September 30, 2023.

Where can I deposit and/or exchange Rs 2,000 banknotes kept at home for emergency purpose?

You can approach any bank branch for deposit and/or exchange of Rs 2,000 banknotes. The facility for deposit into accounts and exchange for Rs 2,000 banknotes will be available at all banks until September 30, 2023.

Also read: Five reasons why Rs 2,000 note withdrawal can't be compared to 2016 demonetisation

Is there a limit on deposit of Rs 2,000 banknotes into a bank account?

No, there is no limit on deposit of Rs 2,000 banknotes into a bank account. The deposit into bank accounts can be made without restrictions subject to compliance with Know Your Customer (KYC) norms and other regulatory requirements.

Is there an operational limit on the amount of Rs 2,000 banknotes that can be exchanged at bank branches?

Yes, you can exchange Rs 2,000 banknotes up to to a limit of Rs 20,000 at a time. You can avail an exchange facility at the bank branches and at the Regional Offices (ROs) of RBI from May 23, 2023 onwards until September 30, 2023. There are no charges for the exchange facility of banknotes.

Do I need to submit a form and given an identity proof while exchanging Rs 2,000 currency notes?

No, you don’t require any form and identity proof to be submitted at the time of exchanging Rs 2,000 currency notes. The State Bank of India clarified this in a press release on May 20.

The clarification came as social media was flooded with pictures of a purported "form", which would have to be filled to deposit or exchange the Rs 2,000 note. The "form" also asked for an identity proof.

I have an account with the HDFC Bank, but in my locality I have the State Bank of India (SBI) branch. Can I exchange Rs 2,000 banknotes from the SBI branch?

Yes, you can exchange Rs 2,000 banknote from the SBI branch. A non-account holder also can exchange Rs 2,000 banknotes up to a limit of Rs 20,000 at a time at any bank branch.

I need around Rs 20,000 petty cash in my business and for other purposes. What I should do?

You can deposit Rs 2,000 banknotes from your petty cash into your bank account and withdraw thereafter against these deposits in other denomination.

Whether there will be special arrangements for senior citizens, persons with disabilities, etc. for exchange and deposit?

Yes, banks have been instructed to make arrangements to reduce inconvenience to the senior citizens, persons with disabilities, etc., seeking to exchange or deposit Rs 2,000 banknotes.

What will happen if one cannot deposit / exchange Rs 2,000 banknote immediately?

The RBI has given a period of over four months for deposit and/or exchange of Rs 2,000 banknotes. A further clarification is required from the central bank on what one can do with Rs 2,000 banknotes left with us after September 30, 2023.

If a bank refuses to exchange / accept deposit of Rs 2,000 banknote. What a depositor can do?

In case of a deficiency of service while exchanging or depositing the Rs 2,000 banknotes, you can raise a complaint with a concerned bank. If the bank does not respond within a period of 30 days after lodging of the complaint or you are not satisfied with the response/resolution given by the bank, you can lodge a complaint with the Integrated Ombudsman Scheme of the RBI.