The Reserve Bank of India (RBI) issued a clear message on Friday, emphasizing that the Rs 2,000 denomination banknote will lose its monetary value after the close of business on Saturday. If individuals fail to exchange these notes at a bank before this deadline, they will essentially hold worthless pieces of paper, as reported by news agency ANI.
This announcement by the central bank reaffirmed the September 30, 2023 deadline for exchanging the Rs 2,000 notes within a stipulated timeframe. The clarification came in response to speculations suggesting a possible extension of the exchange deadline until the end of October.
Until September 30, individuals have the opportunity to exchange the Rs 2,000 currency notes at any of the 19 regional offices of the RBI or at their nearest bank branches. However, it’s crucial to note that there is a cap of Rs 20,000 for exchanging these notes for lower denominations in a single transaction.
The RBI had initially declared on May 19 earlier this year its decision to phase out the Rs 2,000 denomination banknotes from circulation, while affirming their continued status as legal tender. Banks were promptly advised to cease the issuance of these banknotes.
The introduction of the Rs 2,000 denomination banknotes occurred in November 2016, under Section 24(1) of the Reserve Bank of India (RBI) Act, 1934. This move was primarily aimed at swiftly meeting the economy’s urgent demand for currency following the demonetization of Rs 500 and Rs 1000 banknotes that were in circulation at the time. In a recent report, the RBI disclosed that approximately 93% of the Rs 2,000 banknotes have been returned to the banking system since the central bank’s decision in May to withdraw these high-value notes from circulation.
As of August 31, 2023, the cumulative value of Rs 2,000 banknotes returned from circulation, as per bank data, amounted to Rs 3.32 lakh crore, as officially communicated by the RBI.
What Happens After October 1?
The RBI has provided clear guidance that Rs 2,000 currency notes will continue to be recognized as legal tender even after the conclusion of September 30. However, starting from October 1, individuals will only be able to exchange these notes at the RBI. The central bank has also stipulated that non-account holders can exchange these banknotes at any bank branch, with a limit of Rs 20,000 per transaction. It is essential to be aware that the standard Know Your Customer (KYC) requirements and other legal deposit norms will still be applicable.
Individuals will retain the option to exchange their Rs 2,000 notes at any of the 19 Regional Offices (ROs) of the RBI or at nearby bank branches.