Reserve Bank of India Withdraws 2,000 Rupee Notes – Know Everything in 2023
The 2,000 rupee notes will no longer be in circulation, but they will still be considered legal money, according to a May 19, 2023 announcement by the Reserve Bank of India (RBI). The central bank said in a statement that anyone in possession of these notes may deposit them in their bank accounts or swap them between May 23 and September 30.
Additionally, banks have been instructed by the RBI to immediately stop issuing banknotes with a denomination of 2,000. The anticipated lifespan of 4-5 years has come to an end for about 89% of the banknotes with a face value of 2,000 and were printed before March 2017.
Everything You Need to know about the Reserve Bank of India’s Move!
The total quantity of these banknotes in circulation has dropped from an all-time high of 6.73 lakh crore as of March 31, 2018 (37.3% of notes in circulation) to a bottom of 3.62 lakh crore as of March 31, 2023, which represents just 10.8% of notes in circulation.
“It has also been noted that transactions with this denomination are uncommon. Additionally, there are still enough banknotes available in various denominations to satisfy the public’s desire for money. It has been decided to remove the 2,000 denomination banknotes from circulation in light of the aforementioned and in accordance with the RBI’s “Clean Note Policy,” the central bank announced.
Starting on May 23, 2023, the 19 Regional Offices (ROs) of the RBI with Issue Departments will additionally offer the option to exchange up to ₹20,000 rupees worth of banknotes at a time. As was the case with demonetization, we anticipate a slight improvement in bank deposit accretion in the near future. This will relieve the pressure on deposit rate increases and may also lead to a decrease in short-term interest rates, according to Karthik Srinivasan, senior VP, group head of financial sector ratings, ICRA.
It must be noted that the RBI stopped accepting equivalent notes in 2013 and 2014. The demonetization of the 500 and 1,000 rupee notes by the Indian government in November 2016 led to the introduction of the 2,000 rupee notes in 2017. This choice was made by Prime Minister Narendra Modi in a shocking speech to the country. He claimed that the step would discourage cash-based transactions and reduce the shadow economy.
