RBI withdraws Rs 2000 notes from circulation, asks all to exchange or deposit them by Sept 30

Mr.J

Mr.J

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The Reserve Bank of India (RBI) today said that Rs 2000 currency notes will be withdrawn from circulation but they will continue to be legal tender.

In a statement released on Friday, the central bank stated: “In pursuance of the “Clean Note Policy” of the Reserve Bank of India, it has been decided to withdraw the ₹2000 denomination banknotes from circulation. The banknotes in ₹2000 denomination will continue to be legal tender. To complete the exercise in a time-bound manner and to provide adequate time to the members of public, all banks shall provide deposit and/or exchange facility for ₹2000 banknotes until September 30, 2023.”

The RBI also asked banks to stop issuing Rs 2,000 notes with immediate effect.

Explaining the move, the RBI said: “About 89% of the ₹2000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life-span of 4-5 years. The total value of these banknotes in circulation has declined from ₹6.73 lakh crore at its peak as on March 31, 2018 (37.3% of Notes in Circulation) to ₹3.62 lakh crore constituting only 10.8% of Notes in Circulation on March 31, 2023. It has also been observed that this denomination is not commonly used for transactions. Further, the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public.”

indianexpress.com

RBI withdraws Rs 2,000 notes from circulation, asks all to exchange or deposit them by Sept 30

In a statement, the Reserve Bank of India said it has asked banks to stop issuing Rs 2,000 notes with immediate effect
indianexpress.com indianexpress.com
 
Wah
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6pack said:
Maybe they're planning a new 5k note with the size of a 500 rupees note.
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That'd be so stupid. Will definitely promote black money hoarding. Additionally people won't break down 5K notes into smaller denomination that easily as the next lower would be 500 which would require 10 notes for 5K.
Too large of a gap between currency denomination is not only trouble but also not an ideal scenario.
Smaller denomination of the currency will make it a little difficult to hoard cash. I think that's the thought here.
 
enthusiast29 said:
That'd be so stupid. Will definitely promote black money hoarding. Additionally people won't break down 5K notes into smaller denomination that easily as the next lower would be 500 which would require 10 notes for 5K.
Too large of a gap between currency denomination is not only trouble but also not an ideal scenario.
Smaller denomination of the currency will make it a little difficult to hoard cash. I think that's the thought here.
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Bro i think he was just joking n didn't really mean that lol
 
All paper currencies will slowly and eventually be withdrawn, everyone will have to use online transactions.
CBDC will eventually make sure every single transaction is tracked.
 
The withdrawal of about 10 years old currency done by the government in 2013-14 seems to have been done mainly for security reasons - Before 2005, notes didn't have the year printed; multiple designs of a same note. After 2005, they've added machine readable security thread, watermark & printed year. So, for a given denomination, you'd get an updated note in exchange of an old one.

This similar routine exercise, on the other hand, is reportedly because -
“One, there was the issue of soiled Rs 2,000 notes lying with the RBI. The other was that Rs 2,000 notes are not popular and they are just lying around. They have run their life cycle. Even at the peak of their being in circulation, they did not comprise much of the currency in circulation and, at present, are only 10%-11% of the total currency. When the demonetization of Rs 500 and Rs 1000 notes was done in 2016, they comprised 80% of the total currency in circulation. So there is a huge difference.”
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So, for a 4-6 years old Rs.2000 note, you'd get probably 4 * Rs.500 notes.

Wow, it's like Deja Vu! How so striking! History repeats itself!


But seriously, am I missing some sort of economical logistics issue here?
“The objective of introducing Rs 2,000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, printing of Rs 2,000 banknotes was stopped in 2018-19,” the RBI said, adding that “it has also been observed that this denomination is not commonly used for transactions” and “the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public”.
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How does introducing a different, arguably not-so-usable note, help other notes to become available in adequate quantities? I'm not trying to be a cynic here, I genuinely want to know. To me, it sounds like they're trying their best to cover-up a bad call, and it is surprising how a "top official from RBI" can make such dodgy, "but you let brother do it", apples-to-oranges statement, and no reporter goes "This doesn't really sound similar".
 
they should actually honestly start raiding places, starting off with properties and places of MP/MLAs irrespective of their political parties instead of withdrawing banknotes. SMH. saying since printing banknotes themselves costs a lot of money which is sucked out of the very few % of taxpayers that we have.
 
Before the pandemic, I stayed at a rented property. The landlord insisted to pay rent in cash over NEFT to avoid taxes or something like that.

I paid him with these notes. He would be extremely cross at me as he had no choice but to deposit that at a bank as acceptance was low for most daily transactions.
 
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