The Reserve Bank of India (RBI) on May 19 said it plans to withdraw Rs 2,000 notes from circulation based on a review. However, the banknotes in Rs 2,000 denomination will continue to be legal tender, the RBI said in a release.
"In view of the above, and in pursuance of the 'Clean Note Policy' of the Reserve Bank of India, it has been decided to withdraw the Rs 2,000 denomination banknotes from circulation," the RBI said.
The RBI has advised members of the public to deposit Rs 2,000 banknotes in their bank accounts or exchange them for banknotes of other denominations at any bank branch.
An analysis of the latest data from the RBI on the banknotes in circulation as on March 31, 2022, showed that Rs 500 note was the highest denomination currency in circulation, worth Rs 22.77 lakh crore in value terms, which was 73.3 percent of the total circulation.
This was followed by Rs 2,000 bank notes, which constituted 13.8 percent of the total circulation.
The latest release on May 19 by the RBI showed the total value of Rs 2,000 banknotes was Rs 3.62 lakh crore constituting only 10.8 percent of notes in circulation on March 31, 2023.
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.
“It has also been observed that this (Rs 2,000 banknote) denomination is not commonly used for transactions. Further, the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public,” the RBI said in the release.
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