The Reserve Bank of India has removed INR 2,000 notes from circulation as part of its Clean Note Policy. The RBI has stated that banknotes of INR 2,000 will no longer be valid currency. Which indicates a consumer cannot purchase with that money.

2016 all INR 500 and INR 1,000 banknotes lost legal tender status. The RBI created the INR 2,000 denomination banknotes under Section 24 (1) of the RBI Act, 1934. When the Janata Party government, led by Prime Minister Morarji Desai, demonetized the 500 and 1,000 notes in 2016, the financial system was shaken. Indians rushed to banks and ATMs to exchange banknotes for legal cash. Many residents were outraged and shocked by how suddenly this change was implemented.

However, the elimination of INR 2,000 banknotes is not indicative of de-monetization and is an action RBI has previously performed. All banknotes printed before 2005 were removed from circulation in 2013 and 2014 by the Reserve Bank of India, and residents were obliged to exchange them by returning them to banks. The Reserve Bank also stated that the legal tender status of notes issued before 2005 would be maintained.

What the RBI Has to Say About INR 2000 Notes?

The RBI stated in a news release that the goal of releasing INR 2,000 banknotes had been achieved after banknotes of other denominations were made sufficiently available. As a result, the production of INR 2,000 banknotes was discontinued in 2018 - 2019.

According to statistics, the entire value of these banknotes, printed before March 2017, has decreased from INR 6.73 lakh crore, which was the peak value as of March 31, 2018, to INR 3.62 lakh crore, which will make up just 10.8% of the notes in circulation on March 31, 2023. It indicates that the INR 2,000 notes are nearing the end of their four- to five-year lifespan.

The RBI stated that the supply of banknotes in other denominations is sufficient to fulfil the country's monetary needs. It also noted that the INR 2,000 denomination was used sparingly for transactions.

How To Do With Your 2000 Rupee Notes?

The RBI has instructed banks to cease issuing INR 2,000 currency immediately. People should take the following actions as citizens to exchange their INR 2,000 banknotes:

You may deposit the INR 2,000 banknote into your account or trade it for notes of different denominations.

·       Deposits into bank accounts should be as usual, without limitations, and following laws.

·       Starting on May 23, 2023, any bank will allow the conversion of INR 2,000 banknotes into banknotes of other denominations up to a cap of INR 20,000 at a time. Until September 30, 2023, all banks will offer deposit and exchange services for INR 2,000 banknotes.

·       The INR 2,000 banknotes can be deposited or exchanged till September 30, 2023.

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