The Reserve Bank of India (RBI) recently announced that it would no longer be issuing new Rs 2,000 notes, and will start withdrawing existing ones from circulation. On the other hand, the RBI added that bank notes of Rs 2,000 denomination will continue to be legal tender.
The RBI said that people can deposit Rs 2,000 notes into their bank accounts or exchange them for banknotes of other denominations at any bank branch. “Deposit into bank accounts can be made in the usual manner, that is, without restrictions and subject to extant instructions and other applicable statutory provisions,” the RBI said.
“In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of ₹2000 banknotes into banknotes of other denominations can be made upto a limit of ₹20,000/- at a time at any bank starting from May 23, 2023,” said RBI in a press note.
The Rs 2,000 notes are the maximum denomination notes running in the Indian economic system, as they are established in November 2016 after the demonetization of the Rs 500 and Rs 1000 notes, which were in circulation before demonetization.
The main reason behind the move was to eradicate the circulation of black money and to encourage digital payments. However, it seems the movement was not as successful as the government imagined.
