2000 NOTE IS WITHDRAWN BY RBI UNDER THE CLEAN NOTE POLICY
The Reserve Bank of India (RBI) has decided to withdraw Rs 2,000 notes from circulation under its **clean note policy**². The clean note policy was adopted by the RBI to ensure the availability of good quality banknotes to the public. The policy aims to maintain the integrity of the Indian currency by removing damaged, counterfeit, or soiled notes from circulation⁵.
From May 23, 2023, banks will exchange the Rs. 2000 currency notes up to a ceiling of Rs 20,000 at a time. These currency notes are completely valid and no one can refuse to take them, but only till September 30, 2023. The RBI has said categorically that the value of the rupee has not been eliminated¹.
(1) All about RBI’s clean note policy, under which it has withdrawn Rs 2,000 notes.
(2) All about RBI clean note policy, under which it has withdrawn Rs ….
(3) Highlights Of The RBI Decision To Withdraw Rs 2000 Notes.
(4) Rise In Digital Payments A Reason To Withdraw Rs 2,000 Notes, Says RBI.
(5) Why RBI decided to withdraw the high denomination Rs 2,000 note from circulation.
The clean note policy was adopted by the RBI to ensure the availability of good quality banknotes to the public. The policy aims to maintain the integrity of the Indian currency by removing damaged, counterfeit, or soiled notes from circulation. Under the clean note policy, banks and financial institutions are required to withdraw unfit or damaged notes from circulation and replace them with new ones. The RBI regularly monitors the quality of currency notes in circulation and sets standards for their acceptability.
In December 2013, the RBI issued a statement as part of its clean note policy asking banks to exchange soiled notes of even non-customers and issue only good quality clean notes to the public.
The RBI has said that the Rs. 2000 currency notes are completely valid and no one can refuse to take them, but only till September 30, 2023. According to the RBI, “The facility for deposit and/or exchange of ₹2000 banknotes shall be available for members of the public up to September 30, 2023.”
After September 30th, it is likely that the Rs. 2000 notes will no longer be accepted as legal tender. However, it is important to note that the RBI has said categorically that the value of the rupee has not been eliminated.
The RBI has mentioned several reasons that influenced its decision to withdraw the Rs. 2000 notes. One of the reasons cited is the rise in digital payments. Another reason is that about 89% of the Rs. 2000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated lifespan of four-five years. The total value of these banknotes in circulation declined from Rs. 6.73 lakh crore at its peak on March 31, 2018 (37.3% of notes in circulation) to Rs. 3.62 lakh crore constituting only 10.8% of notes in circulation on March 31, 2023.
The impact on people holding Rs. 2000 note is that they will have to deposit or exchange their notes for lower denomination notes from May 23 till September 30 for up to Rs 20,000 at a time. After September 30th, it is likely that the Rs. 2000 note will no longer be accepted as legal tender. However, it is important to note that the RBI has said categorically that the value of the rupee has not been eliminated.
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