In a recent announcement, the Reserve Bank of India (RBI) has stated that the highest denomination currency note in India, the Rs 2000 note, will be phased out from circulation. However, the central bank emphasized that the Rs 2000 notes will continue to be legal tender.
The RBI has provided guidelines for the public regarding the phasing out process. Individuals are encouraged to either exchange or deposit their Rs 2000 currency notes at any bank branch. However, there is a transaction limit set at Rs 20,000 per transaction for these exchanges.
To facilitate a smooth transition, the central bank has instructed individuals to submit the Rs 2000 notes into their bank accounts or exchange them for lower denominations at any bank branch. Furthermore, banks have been advised to cease issuing the Rs 2000 currency notes with immediate effect.
The RBI has set a time frame for this process, allowing individuals to deposit or exchange their Rs 2000 notes until September 30, 2023. This time-bound approach aims to provide sufficient opportunity for the public to complete the necessary transactions.
Regarding the deposit of Rs 2000 notes into bank accounts, the RBI has clarified that it can be done without any restrictions, following the regular procedures and in accordance with existing instructions and statutory provisions.
This move by the Reserve Bank of India is expected to have an impact on the circulation of high-denomination currency and may encourage the use of lower denomination notes in daily transactions.