₹2,000 currency note will continue to be legal tender post-September 30, the government clarified on Sunday.
Meanwhile, post-September 30, ₹2,000 notes can be exchanged in the offices of the Reserve Bank of India, officials indicated. They also said that very little re-calibration will be required in ATMs by banks.
RBI, on Friday, announced the withdrawal of ₹2,000 notes from circulation and allowed people to deposit or exchange the notes with banks and its offices between May 23 and September 30.
MyGovIndia busts myths on Twitter
In a series of tweets by MyGovIndia, a citizen-centric government platform that empowers people to connect with the government & contribute towards good governance, the government put forward facts in response to various myths.
The platform said that one big myth is ₹2,000 currency notes will become illegal if not exchanged on or before September 30.
Refuting this, the platform said: “The ₹2000 notes will continue to be legal tender even after September 30, 2023. Your currency remains valid, so keep calm and let’s bust the panic!”
businessline enquired about the post-September 30 position regarding the exchange of notes. There a source said: “Like done in the past, withdrawn notes could be exchanged for value at the RBI office after the due date. Therefore, they will all return to RBI in due course.”
Earlier, RBI said that about 89 per cent of the ₹2,000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life span of 4-5 years.
Notes in circulation
The total value of ₹2,000 banknotes in circulation has declined from ₹6.73-lakh crore at its peak as on March 31, 2018 (37.3 per cent of notes in circulation) to ₹3.62-lakh crore constituting only 10.8 per cent of notes in circulation on March 31, 2023.
It has also been observed 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.
Meanwhile, MyGovIndia reiterated that the latest announcement is not demonetisation, but just an exchange of currency of ₹2,000. “It’s simply a step to facilitate smoother transactions and meet evolving needs,” it said.
At the same time, the exchange facility shall be provided free of cost. Further, any bank, regardless of account ownership, is authorised to exchange ₹2,000 currency notes for smaller denominations.
2016 demonetisation impact
Demonetisation in 2016 necessitated the need for re-calibration of ATMs as the size of ₹500 and ₹2,000 notes were different.
As on February 28, 2023, there are 2.58 lakh ATMs in India and they are capable of dispensing notes in four denominations ₹100, ₹200, ₹500, and ₹2,000 through separate trays.
Normally, ATMs are not dispensing ₹2,000 notes for months, and since it has now been withdrawn from circulation, will re-calibration be required?
On this, a source said: “As most of the banks ATMs were not dispensing these notes, little calibration may be required in some banks.”
The ₹2,000 denomination banknote was introduced in November 2016 under Section 24 (1) of the RBI Act, 1934, primarily to meet the currency requirement of the economy expeditiously after the withdrawal of the legal tender status of all ₹500 and ₹1,000 banknotes in circulation at that time.
The objective of introducing ₹2,000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, the printing of ₹2,000 banknotes was stopped in 2018-19 and now it is withdrawn as part of the clean note policy.
- Also read: Demonetisation – 6 years after