Providing an update on its recent decision to withdraw the ₹2,000 banknotes from circulation, the Reserve Bank of India (RBI) on Monday said the facility to exchange ₹2,000 currency notes across the counter will be provided to the public in the usual manner, that is, as was being provided earlier.
In addition to that, the apex bank has directed to provide appropriate infrastructure at their branches such as “shaded waiting space, drinking water facilities, etc. considering the summer season”.
Also, banks have been asked to maintain daily data on deposits and the exchange of ₹2000 banknotes in a specific format and submit it to the RBI as and when called for.
The central bank on Friday announced the withdrawal of a ₹2,000 denomination banknote but said it will continue to remain a “legal tender”, meaning legal currency, before it is phased out in a time-bound manner.
To complete the exercise in a timely manner and to provide adequate time to the public, all banks have been asked to provide a deposit or exchange facility for ₹2,000 banknotes until September 30, 2023.
Additionally, people can exchange such currency notes up to the limit of ₹20,000 at a time at any bank from May 23, 2023. This has been done to ensure operational convenience and avoid disruption of regular activities across bank branches, says the RBI.
The ₹2,000 denomination banknote was introduced in November 2016 to meet the currency requirement of the economy post demonetisation wherein the government withdrew the legal tender status of all ₹500 and ₹1,000 banknotes in circulation in the country.
The central bank says the decision to withdraw ₹2,000 banknotes has been taken after the objective of introducing other denominations in adequate quantities has been achieved. The printing of ₹2,000 banknotes was stopped in 2018-19. The RBI says about 89% of the ₹2,000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life span of 4-5 years.
The RBI asked the general public to utilise the time up to September 30, 2023, to deposit or exchange the ₹2,000 notes. It has also advised banks to stop issuing ₹2,000 denomination banknotes with immediate effect. The stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public, assures the RBI.
Presently, besides ₹2000, the Reserve Bank issues banknotes in denominations of ₹2, ₹5, ₹10, ₹20, ₹50, ₹100, ₹200, and ₹500. Coins in circulation comprise 50 paise and ₹1, ₹2, ₹5, ₹10 and ₹20 denominations. In value terms, the share of ₹500 and ₹2,000 banknotes together accounted for 87.1% of the total value of banknotes in circulation as on March 31, 2022, as against 85.7% as on March 31, 2021, the RBI's annual FY22 report suggested.
As per the central bank's 'Banknote Survey of Consumers', among banknotes, ₹100 was the most preferred by people, while ₹2000 was the “least preferred” denomination. Among coins, a denomination of ₹5 was the most preferred whereas ₹1 was the least preferred. The survey comprised a diverse sample of 11,000 respondents from rural, semi-urban, urban, and metropolitan areas, spanning 28 states and three union territories.