All Rs 2,000 notes must be deposited or exchanged with the bank by September 30, 2023, as the Reserve Bank of India has declared the withdrawal of Rs 2,000 notes from circulation under the clean note policy. The policy was implemented by the RBI to ensure that the public had access to high-quality bank notes.
CLEAN NOTE POLICY’S HISTORY
Dr. Bimal Jalan, the then-RBI Governor, instituted the clean note policy 24 years ago, in 1999. In 2001, Vepa Kamesam, Deputy Governor of the Reserve Bank of India, directed banks to cease stapling of note packets in favor of banding the packets with paper/polythene bands in order to improve the life of currency notes. The Reserve Bank’s clean note policy strives to provide high-quality currency notes and coins to residents.
The strategy tries to protect the currency’s integrity by eliminating damaged, counterfeit, or dirty notes from circulation. The RBI analyzes the quality of currency notes in circulation on a regular basis and establishes rules for their acceptance. As part of its clean note policy, the RBI released a statement in December 2013 instructing banks to exchange filthy notes from even non-customers and to supply only good quality clean notes to the public. Section 27 of the RBI Act of 1934 specifies that “no person shall, on any premises where banknotes are kept or handled, soil, deface, disfigure, or destroy any banknote.”
2,000 RUPEES NOTE SAGA, HOW IT ALL BEGAN
After Prime Minister Narendra Modi announced the discontinuation of Rs 1,000 and Rs 500 notes in 2016, the RBI began issuing Rs 2,000 notes. Once banknotes of different denominations became available in sufficient amounts, the goal was realized. In 2018-19, the printing of Rs 2,000 banknotes was discontinued. Almost 90% of the Rs 2,000 denomination banknotes were issued prior to March 2017 and are already nearing the end of their expected lifespan (four to five years).
According to the RBI, the total value of these banknotes in circulation has decreased from Rs 6.73 lakh crore on March 31, 2018 (37.3 percent of notes in circulation) to Rs 3.62 lakh crore, constituting only 10.8 percent of notes in circulation. The RBI has now directed all banks to cease issuing Rs 2,000 notes. With the declaration, the government has permitted citizens to deposit or exchange smaller denomination notes for up to Rs 20,000 at a time from May 23 to September 30.
HOW TO EXCHANGE OR DEPOSIT RUPEES 2,000
Individuals can deposit Rs 2,000 banknotes into their accounts or exchange them for banknotes of other denominations at any bank branch. Deposits are not restricted and are subject to current instructions and applicable statutory provisions. Beginning May 23, 2023, individuals will be able to exchange Rs 2,000 banknotes for other denominations up to a ceiling of Rs 20,000 at a time at any bank.