Explained: Why The Rs 2,000 Notes Were Issued And Then Withdrawn

In November 2015 under Section 24(1) of the RBI Act of 1934, the Rs 2,000 banknote was introduced. The RBI Act allows the introduction of notes of any denomination, not exceeding Rs 10,000.

In an expeditious manner after the big demonetisation exercise, in which the legal tender status of all Rs 500 and Rs 1,000 banknotes in circulation at that time was withdrawn, the RBI said.

"With fulfilment of that objective and availability of banknotes in other denominations in adequate quantities, printing of Rs 2000 banknotes was stopped in 2018-19," the RBI also said.

RBI Governor, Shaktikanta Das said that the exercise was part of the currency management system of the Central Bank of India. There is no need to rush to banks as people have four months to change or deposit Rs 2,000 notes, he also said.

We will decide what to do next after September 30. But it will continue as legal tender, Das said.

A majority of the Rs 2,000 notes were issued before March 2017. The RBI said that the notes were not commonly used for transactions.

"The total value of these banknotes in circulation has declined from Rs 6.73 lakh crore at its peak as on March 31, 2018 (37.3 per cent of notes in circulation) to Rs 3.62 lakh crore constituting only 10.8 per cent of notes in circulation on March 31, 2023," the RBI also said.

There were 274 crore Rs 2,000 notes in circulation in 2020, which comprised 2.4 per cent of the total currency notes, which declined to 245 crore in 2021 and further dipped to Rs 214 in 2022.

The RBI said that it has adequate stock of banknotes in other denominations.

The RBI withdrew this note under the Clean Note Policy. The objective of the RBI is to provide good quality currency notes and coins while the soiled ones are withdrawn. The RBI has also directed banks to issue only good quality clean notes to the public and refrain from recycling the soiled notes received by them over their counters.