2000-rupee notes to be withdrawn by the RBI

The Reserve Bank of India announced on Friday, 19th May 2023, that 2000 notes will be withdrawn from circulation, citing evidence showing that it was not being used commonly in transactions.

"The stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public," the RBI added in a statement.

The Government and RBI have clarified that the ₹2000 note will still remain legal tender. An exchange facility for the exchange of ₹2000 notes up to ₹20,000 at a time will be available from May 23rd. Banks have been asked to provide a deposit or exchange facility till September 30, 2023.

In the latest FAQ report by the RBI, it has stated that the exchange facility will be available at all banks and completely free of cost.

The Central Government made a statement saying that no fresh 2000-rupee notes have been printed from 2018-19 onward, and the circulation of such notes has dropped drastically. Meanwhile, the share of the 500-rupee notes in circulation has gone up to more than double from 2020 to 2022. As such, more 500-rupee notes and below have begun to be issued by the RBI.

Modi also told news agency ANI that evidence of ₹2000 notes being hoarded for various illegal purposes had surfaced, which played a part in making this decision.

Opposition parties have slammed the Modi government for yet another abrupt decision regarding demonetization, stating that it was the beginning of yet another demonetization “disaster”, in what appears to be a reference to the demonetization that occurred back in November of 2016, when the legal tender status of 500 and 1000 rupee notes was revoked.

However, there are also supporters of the decision as well. Pronab Sen, an economist and ex-chief statistician of India stated, “Withdrawal of a currency note is demonetization and this is a sensible form of demonetization, ...RBI may set a date when they cease to be a legal tender.".