New Delhi: The Reserve Bank of India (RBI) has announced its decision to phase out ₹ 2,000 notes from circulation. Individuals can now exchange or deposit these notes in their bank accounts by September 30. Commencing May 23, the RBI's 19 regional offices and other banks will accept ₹ 2,000 notes for exchange with lower denomination currency. It's important to note that these notes will continue to be legal tender.

In response to the RBI's directive, all banks have been instructed to cease issuing ₹ 2,000 notes with immediate effect. The ₹ 2,000 note was introduced in November 2016 following the overnight demonetization of ₹ 1,000 and ₹ 500 notes by Prime Minister Narendra Modi. The RBI stated, "The introduction of ₹ 2,000 banknotes served its purpose once an adequate quantity of banknotes in other denominations became available. Therefore, the printing of ₹ 2,000 banknotes was discontinued in 2018-19."

To ensure operational convenience and minimize disruption to regular banking activities, individuals can exchange their ₹ 2,000 banknotes for other denominations up to a limit of ₹ 20,000 at any bank starting May 23, 2023. The RBI further specified that people can deposit or exchange these notes for lower denomination currency until September 30, with a maximum limit of ₹ 20,000 per transaction.

Should the need arise, the RBI may extend the deadline beyond September 30. However, even if anyone possesses a ₹ 2,000 note after the current deadline, it will continue to be accepted as valid currency, according to sources cited by NDTV.

The RBI highlighted that approximately 89% of the ₹ 2,000 banknotes were issued prior to March 2017 and have reached their estimated lifespan of four to five years. The total value of these notes in circulation has decreased from ₹ 6.73 lakh crore at its peak on March 31, 2018 (representing 37.3% of the total notes in circulation) to ₹ 3.62 lakh crore, constituting only 10.8% of the total notes in circulation as of March 31, 2023.

It is worth noting that the ₹ 2,000 note is not commonly utilized for daily transactions. The RBI previously executed a similar withdrawal of notes from circulation in 2013-2014.