The Reserve Bank of India (RBI) has reported that by December 31, 2024, only ₹6,691 crore in ₹2000 banknotes are still in circulation, which is merely 1.88% of the ₹3.56 lakh crore that was in circulation when the withdrawal was declared on May 19, 2023. This indicates that 98.12% of these high-value notes have been returned to the banking system.
Why Was the ₹2000 Banknote Introduced?
The ₹2000 note was introduced on November 10, 2016, as per Section 24(1) of the RBI Act, 1934, following the demonetization of ₹500 and ₹1000 notes. The primary purpose was to quickly replace the void left by demonetization and ensure adequate currency in circulation. However, by May 2023, the RBI observed that 89% of these notes had reached their expected lifespan of 4-5 years, leading to a significant drop in the use of ₹2000 notes. In line with its “Clean Note Policy,” the RBI opted to withdraw these high-denomination notes while ensuring a smooth transition.
Can ₹2000 Notes Still Be Used or Exchanged?
Yes, even though ₹2000 banknotes are no longer actively circulated, they are still considered legal tender. The RBI has made it clear that people can continue to exchange or deposit these notes at designated RBI offices. The central bank’s approach is designed to facilitate a smooth and gradual withdrawal process, ensuring that daily transactions are not disrupted.
The RBI’s structured approach reflects its commitment to maintaining a clean and efficient currency system. As fewer ₹2000 notes remain in circulation, the move aligns with evolving cash usage trends, reinforcing trust in India’s financial system.
