Reserve Bank of India (RBI) on Friday announced that it will withdraw the Rs 2000 denomination banknotes from circulation. However, the central bank has said that the notes will continue to be legal tender and can be exchanged at banks and RBI offices till September 30, 2023.
The RBI said that the decision to withdraw the Rs 2000 notes was taken after a review of the currency management system. The central bank said that the move will help in reducing the volume of high-value notes in circulation and make it easier to track and trace counterfeit notes.
RBI has advised banks to stop issuing Rs 2000 denomination banknotes with immediate effect. However, banks will continue to accept the notes for deposit and exchange till September 30, 2023.
Customers can exchange their Rs 2000 notes for notes of other denominations at any bank or RBI office. The exchange can be made upto a limit of Rs 20,000 at a time.
RBI has also said that it will not be printing any new Rs 2000 notes after September 30, 2023. However, the notes that are already in circulation will continue to be legal tender and can be used for transactions.
RBI's decision to withdraw the Rs 2000 notes has come as a surprise to many. The notes were introduced in November 2016, just days after the government's demonetization drive. The Rs 2000 notes were seen as a way to make it more difficult for counterfeiters to print fake notes.
However, the RBI has said that the decision to withdraw the Rs 2000 notes is not related to the demonetization drive. The central bank said that the move is part of a broader review of the currency management system.
RBI's decision to withdraw the Rs 2000 notes is likely to have a significant impact on the Indian economy. The notes account for a significant portion of the total currency in circulation. Their withdrawal is likely to lead to a shortage of high-value notes in the economy. This could lead to an increase in prices and make it difficult for people to make large transactions.R
RBI has said that it will take steps to ensure that there is no shortage of notes in the economy. The central bank has said that it will print more notes of other denominations to meet the demand. It has also said that it will work with banks to ensure that there is adequate availability of notes at ATMs and bank branches.