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RBI to withdraw INR 2,000 banknotes, deadline set for exchange
The decision to withdraw the INR 2,000 banknotes comes ahead of upcoming state and general elections when cash usage tends to surge.
New Dehli: The Reserve Bank of India (RBI) announced the withdrawal of INR 2,000 denomination banknotes, urging people to either deposit or exchange them by September 30, the Indian media reported.
While these banknotes will remain legal tender until the specified date, the RBI has not clarified their status afterward. The central bank assured that an adequate supply of other denominations is available to meet the public's currency requirements.
Introduced in November 2016 following the demonetization of INR 500 and 1,000 notes, the INR 2,000 banknotes were meant to quickly replenish the currency circulation. However, the RBI has consistently expressed its intention to reduce the circulation of high-value notes and ceased printing the INR 2,000 denomination over the past four years.
The decision to withdraw the INR 2,000 banknotes comes ahead of upcoming state and general elections when cash usage tends to surge. Political parties in India are known to stockpile high-denomination bills to finance election campaigns within the limits set by the Election Commission.
As of now, the total value of INR 2,000 notes in circulation amounts to INR 3.62 trillion ($44.27 billion), comprising approximately 10.8% of the currency in circulation. Unlike the more commonly seen INR 500 and 1,000 notes in 2016, the INR 2,000 denomination is less prevalent among the public since its printing was discontinued in 2018-19.