The Story Behind the Introduction and Eventual Withdrawal of 2,000 Rupees Currency Notes
A great deal (89%) of the 2,000 notes were printed around March 2017 and are nearing the finish line of their predicted four- to five-year lifespan.
The craze of the initial days and the eventual dismantling of the 2000 Rs notes tell another controversial financial decision by the current Indian government. The process is set to have long lines of customers before the banks in the current humid and hot weather.
RBI on the issue
The Reserve Bank of India has said that the introduction of the Rs. 2,000 banknote in November 2016 was done in accordance with Section 24(1) of the RBI Act, 1934, which permits the central bank to issue notes of any denomination up to Rs. 10,000. This was done primarily to meet the economy’s need for currency “immediately” following the large-scale demonetization exercise, in which all Rs. 500 and 1,000 banknotes in circulation at the time lost their legal tender status.
“With fulfilment of that objective and availability of banknotes in other denominations in adequate quantities, printing of ₹ 2000 banknotes was stopped in 2018-19,” RBI said.
“The total value of these banknotes in circulation has declined from ₹ 6.73 lakh crore at its peak as on March 31, 2018 (37.3% of Notes in Circulation) to ₹ 3.62 lakh crore constituting only 10.8% of Notes in Circulation on March 31, 2023,” RBI said.
How to exchange 2000 Rs. notes
The State Bank of India, the largest public bank in India, made it clear yesterday that no paperwork or form will be necessary when exchanging or depositing notes worth USD 2,000.
2,000 notes up to 20,000 in total can be exchanged innumerable times each day, according to government sources. After exchanging the money, they explained, a person must stand in line and may return at any time to do the same. To maintain administrative comfort and prevent disturbance of the routine activities of bank branches, a top limit of 20,000 has been established.
The exchange facility will operate from May 23 to September 30.