The Story Of The Rs 2000 Note: Why It Was Introduced & Junked

The central bank said the existing Rs 2,000 notes can be deposited or exchanged in banks until September 30. The RBI advised the public to deposit Rs 2,000 notes into their bank accounts and/ or exchange them for notes of other denominations at any bank branch. It also advised banks to stop issuing Rs 2,000 notes with immediate effect.

Clarifying its decision, RBI Governor Shaktikanta Das today said, “Let me clarify and re-emphasise that it is a part of the currency management operations of the Reserve Bank.”

“For a long time, the Reserve Bank has been following a clean note policy. From time to time, RBI withdraws notes of a particular series and issues fresh notes,” Das said, adding, “We are withdrawing the Rs 2000 notes from circulation but they continue as legal tender.”

The RBI governor said, “We have clearly explained in our press note that the Rs 2000 notes were primarily issued for the purpose of quickly replenishing the value of money which was being taken out from the system when the legal tender status of then-prevailing Rs 1000 and Rs 500 notes was withdrawn.”

“That purpose has been fulfilled, today there are enough notes in circulation, of other denominations,” he added.

“Even the circulation of Rs 2000 notes as we have explained has come down from its peak of 6 lakh 73,000 crores to about 3 lakh 62,000 crores. The printing also has been stopped. The notes have completed their life cycle. The central bank will be sensitive to difficulties faced by people regarding the exchange of Rs 2,000 bank notes. Banks have been advised to make necessary arrangements for an exchange of Rs 2,000 bank notes.”

“We expect most of Rs 2,000 bank notes to come back to exchequer by September 30,” the governor said. Das also said that the existing Income Tax requirement of PAN for Rs 50,000 or more deposits in bank accounts will apply to Rs 2,000 notes as well.