2000 Note News: RBI Urges Deposit and Exchange of Rs 2,000 Banknotes?

2000 Note News: The central bank urges individuals to deposit or exchange their Rs 2,000 banknotes at any bank branch. The Reserve Bank of India (RBI) has announced that starting from May 23, an exchange facility will be available for Rs 2,000 banknotes up to Rs 20,000 at a time, according to an official statement.

To facilitate the process, the RBI has instructed banks to offer deposit and exchange services for Rs 2,000 notes until September 30, 2023. Deposits into bank accounts can be made without restrictions, following the usual procedures and in compliance with applicable regulations.

Additionally, the RBI has advised banks to discontinue the issuance of Rs 2,000 denomination banknotes with immediate effect.

Political parties have expressed their disapproval of this decision. Saurabh Bhardwaj, a leader from the Aam Aadmi Party, raised concerns about the potential consequences of this move, attributing the issue to Prime Minister Modi’s previous actions. Jairam Ramesh, the Congress general secretary in-charge of communications, criticized the withdrawal of Rs 2,000 notes on Twitter, highlighting their initial introduction as a misguided decision. Congress leader Pawan Khera also voiced criticism, linking the move to the past demonetization event of November 8, 2016.

The RBI has stated that the objective of introducing the Rs 2,000 denomination banknote in November 2016 was to swiftly meet the currency requirements of the economy after the withdrawal of legal tender status for Rs 500 and Rs 1,000 notes. Once an adequate supply of banknotes in other denominations became available, the objective was achieved.

Approximately 89% of the Rs 2,000 denomination banknotes were issued prior to March 2017 and have now reached their estimated lifespan of 4-5 years. The total value of these banknotes in circulation has declined from its peak of Rs 6.73 lakh crore on March 31, 2018 (representing 37.3% of Notes in Circulation) to Rs 3.62 lakh crore, constituting only 10.8% of notes in circulation as of March 31, 2023.

The RBI noted that the Rs 2,000 denomination is not commonly used for transactions, and there is an ample supply of banknotes in other denominations to meet the public’s currency requirements.

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