The Reserve Bank of India (RBI) has decided to stop issuing banknotes in the Rs 2,000 denomination. However, according to a Friday circular, the notes will continue to be legal tender.
The Reserve Bank of India (RBI) has instructed banks to stop issuing Rs 2,000 banknotes immediately. The central bank issued a circular stating that all Rs 2,000 notes must be exchanged by September 30, 2023.
All banks are required to offer deposit and/or exchange facilities for Rs 2000 banknotes until September 30, 2023, and the central bank has asked citizens to exchange Rs 2,000 currency notes by that date in order to complete the exercise in a time-bound manner and allow enough time for the public. Up until September 30, all banks have been asked to offer deposit or exchange facilities for Rs 2,000 banknotes. However, the Rs 2,000 notes will continue to be accepted as money.
The central bank also stated that beginning on May 23, Rs 2,000 notes can be exchanged for notes of other denominations up to a limit of Rs 20,000 at a time at any branch to ensure operational convenience and prevent disruption of bank branch operations.
The Rs 2,000 division cash note was presented in November 2016 following the demonetization of Rs 1,000 and the old Rs 500 banknotes. The RBI claims that the introduction of Rs 2,000 banknotes was successful once sufficient quantities of currency in other denominations became available. In that capacity, the printing of Rs 2,000 banknotes was halted in 2018-19.
Move by RBI:
Making sense of the move, the RBI said, "Around 89% of the Rs 2000 group banknotes were given preceding Walk 2017 and are toward the finish of their assessed life-range of 4-5 years. The total value of these banknotes in circulation has decreased from Rs 6.73 lakh crore on March 31, 2018, when they represented 37.3% of all notes in circulation, to Rs 3.62 lakh crore on March 31, 2023, when they will only represent 10.8% of all notes in circulation. It has additionally been seen that this section isn't normally utilized for exchanges. Additionally, the stock of banknotes in other denominations continues to be sufficient to meet the public's currency needs.
"Considering the abovementioned, and in compatibility of the "Perfect Note Strategy" of the Hold Bank of India, pulling out the Rs 2000 group banknotes from circulation has been chosen. Though, printing of the notes was already stopped in 2018-19.
What It Will Mean for Individuals?
Citizens need not be concerned because the withdrawal will be carried out in a "time-bound" and systematic manner, despite the fact that banks have been advised not to issue Rs 2,000 banknotes immediately.
In a public statement, the national bank said that the Rs 2,000 notes that are as of now available for use will keep on being lawful delicate and individuals can keep on involving them for exchanges and furthermore get them in installment. The RBI has "encouraged" the general public to deposit and/or exchange these banknotes by September 30, 2023, it should be noted.
As a result, citizens will not be impacted immediately by the decision to withdraw Rs 2,000 banknotes because they will have sufficient time to exchange them.
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