On 19 May 2023, the Reserve Bank of India (RBI) announced that the ₹2000 banknote has now been withdrawn from circulation. The ₹2000 banknote was introduced after the Narendra Modi-led government demonetised the ₹500 and ₹1000 denomination banknotes on 8 November 2016.
The ₹2000 banknote was introduced under Section 24(1) of the Reserve Bank of India Act, 1934 in November 2016 to maintain the banknote supply during demonetisation. The situation became normal in 2018-19 and the quantity of other banknotes such as ₹500 and ₹200 increased, after that the printing of ₹2000 banknotes was stopped by the government.
Indian currency (banknotes) circulation in 2022
| Banknotes | Volume | Volume % | Value | Value % |
|---|---|---|---|---|
| 2 & 5 | 11,126 million | 8.5% | ₹ 42.84 billion | 0.1% |
| 10 | 27,804 million | 21.3% | ₹ 278.05 billion | 0.9% |
| 20 | 11,012 million | 8.4% | ₹ 220.26 billion | 0.7% |
| 50 | 8,714 million | 6.7% | ₹ 435.71 billion | 1.4% |
| 100 | 18,142 million | 13.9% | ₹ 1,814.21 billion | 5.9% |
| 200 | 6,044 million | 4.7% | ₹ 1,208.81 billion | 3.9% |
| 500 | 45,546 million | 34.9% | ₹ 22,773.4 billion | 73.3% |
| 2000 | 2,142 million | 1.6% | ₹ 4,283.94 billion | 13.8% |
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89% of ₹2000 denomination banknotes were already issued before March 2017 and have an estimated lifespan of 4 to 5 years. The value of ₹2000 banknotes in the fiscal year ending 31 March 2023 is 3.62 trillion Indian rupees, which is about 10.8% of India’s total banknotes. On the other hand, ₹2000 denomination banknotes constituted 37.3% of the circulation in the financial year ended March 31, 2018.
Indian currency (banknotes) circulation in 2018
| Banknotes | Volume | Volume % | Value | Value % |
|---|---|---|---|---|
| 2 & 5 | 11,425 million | 11.2% | ₹ 44 billion | 0.6% |
| 10 | 30,645 million | 29.9% | ₹ 307 billion | 1.7% |
| 20 | 10,016 million | 9.8% | ₹ 200 billion | 1.1% |
| 50 | 7,343 million | 7.2% | ₹ 367 billion | 2% |
| 100 | 22,215 million | 21.7% | ₹ 2,222 billion | 12.3% |
| 200 | 1,853 million | 1.8% | ₹ 371 billion | 2.1% |
| 500 | 15,469 million | 15.1% | ₹ 7,734 billion | 42.9% |
| 2000 | 3,363 million | 3.3% | ₹ 6726 billion | 37.3% |
It is not the first time that the Reserve Bank of India is withdrawing banknotes from circulation, a similar decision was taken in 2013-14, at that time the banknotes older than 2005 were withdrawn from circulation.
₹2000 denomination banknotes will be withdrawn from circulation under the “Clean Note Policy” of the Reserve Bank of India. Clean Note Policy is a policy adopted by the RBI in 1999 to ensure the availability of good quality banknotes to the public in exchange for soiled and mutilated notes, to dispense good quality notes and coins at branches even to non-customers.
₹500 and ₹1000 banknotes were immediately removed from legal tender during the move demonetization in 2016. But at present, during the withdrawal of ₹2000 banknotes from circulation, the public can go to the bank till 30 September 2023 to either deposit their ₹2000 banknotes in a bank account or exchange them for other denomination banknotes.
The Reserve Bank of India has instructed all commercial banks in India to deposit ₹ 2000 banknotes in bank accounts or exchange them for other denomination banknotes from May 23, 2023 to September 30, 2023. ₹2000 banknotes in the bank can be exchanged for banknotes of other denominations only up to a limit of ₹20000 at a time but there is no restriction on depositing ₹2000 banknotes in bank accounts.