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On 19 May 2023 in a landmark announcement, the Reserve Bank of India (RBI) decided to withdraw the circulation of ₹2,000 denomination bank notes from the economy. The ₹2,000 note will continue as legal tender till 30 September 2023. To deposit or exchange the notes, you can visit your nearest bank or RBI’s 19 Regional Offices (RO). Read to for updates on RBI withdraws ₹2000 notes, where to exchange, deposit limit, rules and more.

Further, RBI has also advised banks to stop the issue of new ₹2,000 currency notes with immediate effect.

Important dates on ₹2,000 currency notes withdrawal:

  • 19 May – Announcement on RBI withdraws ₹2,000 notes though it will continue to be used as legal tender
  • 20 May – The State Bank of India (SBI) says customers can exchange ₹2,000 notes up to ₹20,000 without filling any requisition slip or providing ID proof
  • 23 May – Banks in India open facility for exchange of ₹2,000 notes
  • 30 September – Last date to deposit or exchange ₹2,000 notes in banks and RBI-ROs

RBI withdraws ₹2000 notes – Why and overall impact

The RBI withdraws ₹2000 notes – There are several reasons why the RBI decided to withdraw the ₹2000 currency notes:

  • The purpose of introducing the high-value ₹2,000 notes was to meet the currency requirements after the old ₹500 and ₹1,000 notes were discontinued in November 2016
  • Other smaller-value currency notes are now thoroughly in circulation and hence there’s little demand/need for ₹2,000 notes
  • The stock of smaller-value currency note is steady and can meet the economy’s current requirements
  • The majority of the existing ₹2,000 notes were issued before March 2017 and are nearing the end of the estimated four-five year life span
  • The ₹2,000 notes are not frequently used for daily transactions and the total value of ₹2,000 bank notes in circulation has reduced drastically since 2018
  • The move has been initiated to make good quality banknotes available to the public and is a part of RBI’s ‘Clean Note Policy’

Note: Since 2018-19, the RBI has stopped printing new ₹2,000 bank notes. For more details on the RBI ₹2,000 note withdrawal news, read: rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=12505

RBI withdraws ₹2000 notes – this is different from the ban of ₹500 and ₹1,000 notes in November 2016. In 2016, the notes were completely banned, i.e., they would hold no value as legal tender. However, the ₹2,000 notes will continue as legal tender till 30 September, giving members of the public ample time to deposit or exchange the notes. Moreover, unlike the ₹500 and ₹1,000 notes, which were regularly used, the ₹2,000 notes were used less, making up only 10.8% of the currency in circulation (CIC).

How to exchange ₹2,000 bank notes?

23 May (Tuesday) onwards, the exchange of ₹2,000 denomination bank notes has opened at all leading banks in India and will continue till 30 September (Saturday). The deposit/exchange limit however is set at ₹20,000 at a time to ensure that regular banking operations and the public in general are not affected.

Steps to follow to exchange/deposit ₹2000 denomination notes in banks:

  • Visit any commercial bank to exchange or deposit the old ₹2,000 notes. Alternatively, you can visit RBI’s Regional Offices having Issue Departments. Exchange of notes is a free of cost service. However, if the bank levies service charges on cash transactions and deposits, it may still apply.
  • Fill in the exchange or requisition slip with your details e.g., name, date, number of notes etc. Banks reserves the rights to have their own processes for currency note exchange.
  • Sign and submit the requisition form/slip along with the ₹2,000 notes and receive banknotes of other denomination from the bank.

There is however some confusion on the need to show ID proof/ Official Verified Documents (OVD) and fill in the requisition form. Though commercial banks can have their own requirements, the RBI guidelines for general cash-deposits and note exchange have to be followed.

For instance:

  • The State Bank of India, on 22 May announced that no filled-in requisition slip is required to exchange notes
  • At the Punjab National Bank no ID proof is required for exchanging notes, while the South Indian Bank requires ID proof
  • Non-account holders of HDFC Bank, ICICI Bank and Kotak Mahindra Bank will have to provide ID proof during note exchange (Source – The Economic Times, 23 May 2023)
  • No ID proof is required at the Standard Chartered Bank, Axis Bank, Yes Bank and Bank of India (Source: The Wire, 23 May 2023)
  • For HSBC and Federal Bank, for non-account holders, ID proof is required but no form needs to be filled in for exchange of ₹2,000 notes (Source: The Wire, 23 May 2023)

Note:

  • For exchanging currency notes at banks, you do not need to have an account at the bank or branch. You can visit any bank branch to exchange the ₹2,000 notes.
  • For depositing in bank accounts, there is no restriction on daily limit though basic KYC and other statutory rules have to be followed for cash deposits.

Banks have to comply by the standard regulations with respect to reporting suspicious transactions and basic cash transactions.

Impact and things to keep in mind

The ₹2,000 notes will remain as a legal tender till 30 September. This means that it can still be used for all transactions till the deadline date.

What it means for small business owners?

For a small scale business dealing with petty cash and day-to-day operating expenses, there is little need to panic. The notes can easily be used and/or exchanged and deposited in banks, hassle-free.

On the other hand, there could also be an increase in spends as people would want to use the ₹2,000 notes they have. As per general news, many members of the public have visited petrol pumps, jewellery and precious metal stores, etc. to spend these high-denomination notes.

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What it means for banks?

While the timeline provided gives everyone time to plan and prepare, the decision of ₹2,000 note withdrawal could impact the banking system to some extent.

For instance, if people are depositing the ₹2,000 notes into their bank accounts, there would immediately be an increase in total deposits and decrease in currency-in-circulation (CIC). On the other hand, if people prefer to exchange the high-value note for smaller denomination notes, there would be no impact on CIC or deposits.

This is a generally been seen as a temporary situation and not something having a long-term impact on businesses, financial systems, the public and financial systems at large.

FAQs

What is meant by ₹2,000 will continue to be legal tender?

Legal tender of ₹2,000 notes mean that the notes can be used by the public and will hold the complete value till 30 September. The RBI, since 2018-19 has ceased printing new ₹2,000 and will no longer print new ₹2,000 notes. The ones in circulation can be exchanged for other denominations or deposited in banks. Banks have also been advised not to issue ₹2,000 notes with immediate effect.

What is the last date to exchange ₹2,000 bank notes?

The current date is set at 30 September 2023 for all members of the public to exchange/deposit their ₹2,000 bank notes.

What is the exchange limit per day for ₹2,000 bank notes?

The daily exchange limit is set to ₹20,000 at a time. You can visit any bank to exchange your ₹2,000 currency notes (up to ₹20,000) for other denomination currency notes.

What is the exchange limit for ₹2,000 notes through Business Correspondence?

If you want to exchange the notes through Business Correspondence (BC), the limit is currently set at ₹4,000 per day for account holder (i.e., you can exchange up to 2 notes in a day).

What documents do I need to carry to exchange/deposit ₹2,000 notes?

There is still some confusion on documents required for ₹2,000 notes exchange and deposit. While the rules differ between banks, it’s recommended to carry one official ID proof (e.g., Aadhaar card) and the ₹2,000 notes. If you are an existing account holder for a particular bank and want to deposit ₹2,000 cash into your account, the extant KYC and other statutory norms for cash transaction will be applicable (e.g., PAN card will be required if you are depositing more than ₹50,000 in cash).

Is there any service fee/charge being levied?

As per the RBI, the exchange of ₹2,000 notes will be free of cost. However, if you want to deposit the notes into your account, the existing cash-deposit related rules will be applicable. For example, if the cash deposits in a month exceed a limit, the customer may have to pay a service charge. For example: HDFC Bank and ICICI Bank charges a service fee of ₹150 (+taxes) after the first four transactions in a month.

What if a bank refuses to accept ₹2,000 notes?

If a brank bank refuses to exchange ₹2,000 currency note, you should first write/complain to main branch / head office of the respective bank. If no resolution is reached within 30 days, you can write to RBI for a resolution.

In which cities are RBI’s Regional Offices located?

You can visit RBI’s Regional Offices to exchange ₹2,000 notes. Here’s a list of cities with RBI Regional Offices:
  • North: Chandigarh, Jammu, Kanpur, Lucknow, New Delhi
  • South: Bangalore, Chennai, Hyderabad, Thiruvananthapuram
  • East: Bhubaneshwar, Guwahati, Kolkata, Patna
  • West: Ahmedabad, Belapur, Jaipur, Mumbai
  • Central: Bhopal, Nagpur
(Source: rbi.org.in/Scripts/FAQView.aspx?Id=157)

Sohini Banerjee

Sohini is a seasoned content writer with 12 years’ experience in developing marketing and business content across multiple formats. At Tata nexarc, she leverages her skills in crafting curated content on the Indian MSME sector, steel procurement, and logistics. In her personal time, she enjoys reading fiction and being up-to-date on trends in digital marketing and the Indian business ecosystem.