The Reserve Bank of India (RBI), on Friday, annoounced its decision to withdraw Rs 2,000 denomination notes from circulation. The central bank said that the objective of introducing Rs 2,000 notes "was met once bank notes in other denominations became available in adquate quantities".
All banks have been advised to stop issuing Rs 2,000 notes with immediate effect.
However, it was clarified that the currency will continue as legal tender.
RBI also informed that all banks will provide deposit/exchange facility until September 30, 2023 so that the exercise can be completed in a time-bound manner.
To ensure that the exchange process does not disrupt other banking activities, the central decided that Rs 2,000 notes can be exchanged for other denomination upto a limit of Rs 20,000.
This can be done by the general public at any bank from May 23 onwards.
In the statement issued by RBI, it was noted that the total value of Rs 2,000 notes in circulation reached a peak of Rs 6.73 lakh crore on March 31, 2018. As of March 21 this year, the total value of Rs 2,000 denomination in circulation was Rs 3.62 lakh crore.
Since 89 per cent of the Rs 2,000 notes were issued before March 2017, it is already at the end of its estimated lifecycle of 4-5 years, the bank added.
