RBI withdraws Rs 2000 notes from circulation, asks banks to stop issuing notes immediately

In a big decision, the Reserve Bank of India (RBI) has withdrawn ₹2000 notes from circulation.

RBI has asked banks to stop issuing them with immediate effect. However, ₹2000 notes will still remain legal tender.

A facility for exchange of ₹2000 notes will be available from the 23rd of May until the 30th of September. Notes worth ₹20,000 can be exchanged at a time.

Depsosits of the notes into bank accounts can be made in the usual manner without restriction but subject to compliance with KYC norms and other statutory requirements.

In its notification RBI says that "the objective of introducing ₹2000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, printing of ₹2000 banknotes was stopped in 2018-19."

About 89% of the ₹2000 notes were issued prior to March 2017 and are at the end of their estimated life-span of 4-5 years.

RBI circular also pointed out that this denomination is not commonly used for transactions. Further, the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public.