Monday, May 27, 2024

RBI announces withdrawal of ₹2000 banknotes from circulation

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2000-denomination banknotes will no longer be in circulation but will remain legal tender.

In accordance with Section 24(1) of the RBI Act, 1934, the introduction of the 2000 denomination banknote in November 2016 was large to satisfy the economy’s immediate need for cash following the withdrawal of the legal tender status of the 500 and 1000 banknotes in use at the time. The printing of 2000-denomination banknotes was discontinued in 2018–19 due to the achievement of the intended goal of its introduction and the availability of appropriate supplies of banknotes in other denominations.

  1. Further, the majority of the ₹2000 denomination notes issued prior to March 2017, have completed their estimated lifespan and are not observed to be commonly used for transactions anymore. Therefore, it has been decided that, in pursuance of the “Clean Note Policy” of the Reserve Bank of India, the ₹2000 denomination banknotes shall be withdrawn from circulation. The ₹2000 banknotes will continue to be legal tender.
  2. Accordingly, to implement the decision stated above, the following plan of action has been formulated which, the banks shall follow meticulously.

A. Managing current inventory and receipts

With immediate effect, all banks must stop issuing banknotes with a denomination of 2000. Cash recyclers and ATMs could also be designed appropriately.

Banks that retain Currency Chests (CCs) must make sure that no withdrawals in the amount of $2,000 are permitted from the CCs. All CC balances must be labeled as unsuitable and maintained available for shipment to the appropriate RBI offices.
In order to ensure accuracy and genuineness, all banknotes of this denomination received by banks must be quickly processed by Note Sorting Machines (NSMs) before being placed in currency chests under the Linkage Scheme or maintained available for delivery to the RBI’s closest issue office.

The guidelines outlined in our Master Direction of April 3, 2023, regarding the identification, reporting, and oversight of counterfeit notes must be strictly adhered to.

B. Deposit and Exchange Facility

The public will have access to the facility for the deposit and/or exchange of 2000-yen banknotes until September 30, 2023.

Deposits of 2000 rupee banknotes can be made normally, that is, without limits and in accordance with current Know Your Customer (KYC) guidelines and other applicable statutory requirements. Additionally, the institutions must abide by any applicable regulations for reporting suspicious and cash transactions, respectively.

All banks must make the facility for exchanging 2000-yen banknotes available to the general public through their branches.

All banks may swap 2000 banknotes up to a limit of 20,000 at a time in order to eliminate discomfort to the public, ensure operational convenience, and prevent disruption of the usual activities of bank branches.

Business Correspondents (BCs) may also be permitted to convert up to a total of $4,000 worth of currency for an account holder each day. Banks may, at their discretion, increase the BCs’ cash holding limitations for this purpose.

The public has been asked to contact banks/branches starting on May 23, 2023, to take use of the exchange facility in order to give the banks time to make necessary preparations. The deposit of 2000-dollar bills may continue in accordance with standard banking procedure.

Banks may consider deploying mobile vans, if necessary, to provide deposit and exchange services to residents of rural and unbanked areas.

The same restrictions will still apply when crediting the value of 2000 rupee notes to Jan Dhan Yojna Accounts or Basic Savings Bank Deposit (BSBD) Accounts.

The banks must, to the greatest degree possible, make particular accommodations for senior citizens, people with disabilities, and women who want to exchange or deposit 2000 notes in order to minimize their difficulty.

C. Refilling of Other Denominations for Exchange Stock

Branches and CCs should plan ahead by estimating how much cash they will need and ordering other denominations of banknotes from the RBI or a linked or nearby currency chest in advance.

When accepting 2000-yen notes and distributing banknotes of other denominations, CC holding branches must provide the necessary assistance to linked and unlinked branches. The banks can get in touch with the relevant Issue Office of RBI if they are having any trouble getting cash.

D. Information Dissemination

The 2000-denomination bills will still be accepted as legal money.

In Annexe, there is a document with Frequently Asked Questions (FAQs) regarding the subject. A copy of the same may be given to the employees working the exchange counters and displayed in the banking area, ATM kiosks, and other public areas.

Separately, a press release is being released to educate the public about the exercise and ask for their cooperation. For quick reference, a copy of the identity document is provided. It may also be posted in the banking area and at ATM kiosks, among other places.

Banks may also think about providing their clients with the proper advice in this regard.

4. The aforementioned guidelines are valid until September 30, 2023.

  1. You are required to give the branches the proper instructions and advise them to offer the public their full cooperation so that the exercise can be carried out without causing any trouble to the general public.

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