India’s central bank, the Reserve Bank of India (RBI) on Friday announced the withdrawal of the Rs 2000 denomination banknotes from circulation. However, the banknotes will continue to be legal tender. The move comes as part of the central bank’s “Clean Note Policy,” which prioritizes providing good quality currency notes. The RBI said a majority of the notes were found to have completed their estimated lifespan. Hence, the withdrawal of Rs 2000 denomination banknotes will mean Rs 500 notes will be the highest denomination currency in circulation.
Exchange Until September 2023
The central bank will allow exchange of the ₹2000 banknotes up to September 30, 2023. In view of the public convenience, the RBI also placed a limit of ₹20,000 for single exchange. Fresh issuance of the bank notes will be discontinued with immediate effect, the central bank said in a circular.
“With a view to minimize inconvenience to the public, to ensure operational convenience and avoid disruption of the regular activities of bank branches, all banks may exchange ₹2000 banknotes upto a limit of ₹20,000/- at a time.”
The actual objective for the launch of Rs 2,000 notes was to meet the immediate currency requirement of the economy after withdrawal of the legal tender status of all ₹500 and ₹1000 banknotes in circulation in November 2016. Therefore, now that the purpose if fulfilled, the highest denomination notes will be withdrawn.
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