Withdrawal of Rs 2000 notes: Here is everything you want to know

May 20, 2023 India Shipping News

NEW DELHI : Reserve Bank of India (RBI) has decided to withdraw the Rs 2000 denomination banknotes from circulation. Although it will remain a legal tender for now and can be deposited in the bank from May 23 to September 30, 2023. According to RBI, in one go, only a total of Rs 20,000 can be deposited. Here is all you need to know about ‘Withdrawal of Rs 2000 Notes’ by RBI.

Q. Why are Rs 2000 denomination banknotes being withdrawn?

A. The Rs 2000 denomination banknote was introduced in November 2016 primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of legal tender status of all Rs 500 and Rs 1000 banknotes in circulation at that time. The objective of introducing Rs 2000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, printing of Rs 2000 banknotes was stopped in 2018-19.

According to RBI, about 89 percent of the Rs 2000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life-span of 4-5 years. The total value of these banknotes in circulation has declined from Rs 6.73 lakh crore at its peak of March 31, 2018 (37.3 percent of notes in circulation) to Rs 3.62 lakh crore constituting only 10.8 percent of notes in circulation on March 31, 2023. It has also been observed that this 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.

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 2000 denomination banknotes from circulation.

Q. What is Clean Note Policy?

A. It is a policy adopted by RBI to ensure availability of good quality banknotes to the members of the public.

Q. Does the legal tender status of Rs 2000 banknotes remain?

A. Yes. The Rs 2000 banknote will continue to maintain its legal status.

Q. Can Rs 2000 banknotes be used for normal transactions?

A. Yes. Members of the public can continue to use banknotes for their transactions and also receive them in payment. However, they are encouraged to deposit and/or exchange these banknotes on or before September 30, 2023.

Q. What should the public do with the Rs 2000 denomination banknotes held by them?

A: Members of 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 until September 30, 2023. The facility for exchange will be available also at 19 Regional Offices are (ROs) of RBI having issue Departments until September 30, 2023.

Q. Is there any limit on deposit of Rs 2000 banknotes in a bank account?

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

Q. Is there an operational limit on the amount of Rs 2000 banknotes that can be exchanged?

A. Members of the public can exchange Rs 2000 banknotes up-to to a limit of Rs 20,000/-at a time.

Q. Can Rs 2000 banknotes be exchanged through Business Correspondents (BCs)?

A. Yes, exchanges of Rs 2000 banknotes can be made through BCs upto a limit of Rs 4000/- per day for an account holder.

Q. From which date will the exchange facility be available?

A. To give time to the banks to make preparatory, members of the public are requested to approach the bank branches of ROs of RBI from May 23, 2023 for availing exchange facility.

Q. Is it necessary to be a customer of the bank to exchange Rs 2000 banknotes from its branches?

A. No. A non-account holder also can exchange Rs 2000 banknotes up to a limit of Rs 20,000/- at a time at any bank branch.

Q. What if someone needs more than Rs 20,000/- cash for business of other purposes?

A. Deposit into accounts cab be made without restrictions. The Rs 2000 banknotes can be deposited into bank accounts and cash requirements can be drawn thereafter, against these deposits.

Q. Is there any fee to be paid for the exchange facility?

A. The exchange facility shall be provided free of cost.

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

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

Q. What will happen if one cannot deposit/exchange Rs 2000 banknotes immediately?

A. To make the entire process smooth and convenient for the public, a period of over four months has been given for deposit and/or exchange of Rs 2000 banknotes, Members of the public, are therefore, encouraged to avail this facility at their convenience within the allotted time.

Q. What will happen if a bank refuses to exchange/accept deposit of Rs 2000 banknote?

A. For redress of grievance in case of deficiency of service, the complainant/aggrieved customer may first approach 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 lodge the complaint under the Reserve Bank- Integrated Ombudsman Scheme (RB-IOS), 2021 at the Complaint Management System portal of RBI (cms.rbi.org.in).