The Reserve Bank of India (RBI) announced on Friday that it would stop issuing currency notes with a face value of Rs 2,000. However, according to a press release from the central bank on Friday, the notes will still be accepted as legal cash.
According to a press release, the introduction of the Rs 2,000 currency note in November 2016 was made possible by Section 24(1) of the RBI Act, 1934. This was done primarily to meet the economy's immediate need for currency following the withdrawal of the legal tender status of all Rs 500 and Rs 1,000 notes in use at the time.
The RBI removed banknotes having a face value of Rs 2,000 from circulation in part due to the fact that the public does not frequently utilize that amount for transactions. The value of these notes has decreased over time, according to the RBI, and as of March 31, 2023, just 10.8% of the notes in circulation are made up of them.
Another justification is that there are sufficient quantities of banknotes in various denominations to satisfy public demand. The "Clean Note Policy," which aims to ensure that the general public can access notes of high quality, is also in line with this decision, according to the RBI.
The notes in the Rs 2,000 denomination will remain legal currency unlike in 2016 when all notes in the Rs 500 and Rs 1,000 denominations were demonetized and could no longer be used as money.
The RBI announced in a news release that starting on May 23, individuals can deposit their Rs 2,000 notes into their bank accounts and swap them for notes of other denominations.
