Exchange of Rs 2,000 notes starts today; Here's all you may need to know
May 23, 2023
New Delhi [India], May 23 : The exchange of Rs 2,000 banknotes, which RBI decided to withdraw from circulation, can be done from today.
Last Friday, the Reserve Bank of India (RBI) decided to withdraw the Rs 2,000 denomination currency notes from circulation, but added they (currency notes) will continue to remain as legal tender. However, RBI has advised banks to stop issuing Rs 2,000 denomination banknotes with immediate effect.
Following is a set of queries that one may have in his/her mind about the Rs 2000 notes, the process for exchange, and how it is different from demonetization.
Where can an individual exchange their Rs 2000 banknotes?
- The exchange facility is only available at bank branches and regional branches of RBI.
Can Rs 2000 banknotes be exchanged through Business Correspondents (BCs)?
- Yes, an exchange of Rs 2000 banknotes can be made through BCs upto a limit of Rs 4000 per day for an account holder.
Can post offices be used for the exchanging of notes?
- No.
Is it necessary to be a customer of the bank to exchange Rs 2000 banknotes from its branches?
- No. A non-account holder also can exchange Rs 2000 banknotes up to a limit of Rs 20,000 at a time at any bank branch.
What if someone needs more than Rs20,000 cash for business or other purposes?
- Deposits into accounts can be made without restrictions. The Rs 2000 banknotes can be deposited into bank accounts and cash requirements can be drawn thereafter.
Is there any fee to be paid for the exchange facility?
- No. The exchange facility shall be provided free of cost.
Will there be special arrangements for senior citizens, persons with disabilities, etc. for exchange and deposit?
- Banks have been instructed to make arrangements to reduce inconvenience to the senior citizens, persons with disabilities, etc., seeking to exchange/deposit Rs 2000 banknotes.
What is the last date for the exchange?
- September 30 has been decided as the last date for the purpose of completing the exercise in a time-bound manner and to provide adequate time to the public.
Is there any need for ID cards for the exchange of Rs 2000 notes?
- According to the State Bank of India (SBI), the largest lender, customers will not be required to submit any ID cards or fill out any requisition forms to exchange their Rs 2000 currency notes. They, however, would be allowed to exchange a maximum of ten currency notes of Rs 2000 at a time.
How long will Rs 2000 notes continue to be legal tender?
- As of now, RBI said the exchange facility is available till September 30, 2023, and the notes continue to be legal tender. RBI is likely to revisit the September deadline based on the situation going ahead.
Can Rs 2000 banknotes be used for normal transactions?
- Yes. the public can continue to use Rs 2000 banknotes for their transactions and also receive them in payment. However, they are encouraged to deposit and/or exchange these banknotes on or before September 30, 2023.
How is this process different from the demonetization drive?
- During the demonetization drive carried out in 2016, legal tender status for Rs 500 and Rs 1000 notes were withdrawn right from day one. For Rs 2000 notes, it continues to be legal tender and people can use it for any transactions.
Why were Rs 2000 notes introduced in the first place?
- The Rs 2000 denomination banknote was introduced in November 2016 under Section 24(1) of RBI Act, 1934, primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of the legal tender status of all Rs 500 and Rs 1000 banknotes in circulation at that time.
Is the objective met?
- The objective of introducing Rs 2000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, the printing of Rs 2000 banknotes was stopped in 2018-19.
Status of Rs 2000 notes currently in circulation?
- The total value of these banknotes in circulation has declined from Rs 6.73 lakh crore at its peak as on March 31, 2018 (37.3 per cent of Notes in Circulation) to Rs 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.
Are there adequate notes in the system?
- Yes, RBI said an adequate number of notes are available to meet the currency requirement of the public.
