In a surprising move, the Reserve Bank of India (RBI) withdraws the Rs 2000 currency notes from circulation on Friday, sending shockwaves throughout the country. However, the bank notes in Rs 2000 denomination will continue to be legal tender.
The RBI has decided to withdraw the Rs 2000 denomination banknotes from circulation in pursuance of its ‘Clean Note Policy’, RBI statement.
The RBI advised all the banks to stop issuing 2000 notes with immediate effect. The current Rs 2000 notes can still be exchanged or deposited in banks up to September 30 with a limit of Rs 20,000 at a time starting from May 23, 2023.
This decision marks a significant shift in the currency landscape and raises questions about the future of cash transactions in India.
The withdrawal of 2000 notes will have short-term and long-term consequences for the Indian economy. People may experience some initial difficulty as they get used to the loss of this valuable denomination. Larger transactions could need numerous lesser-value notes, resulting in slight delays and extended processing times.
However, the government and RBI are trying to reduce these setbacks and ensure a smooth transition.
On Nov8, 2016, the Government of India announced the demonetisation of the Rs 500 and Rs 1000 banknotes. The Demonetisation policy was introduced in the country to curb corruption and reduce counterfeit currency. These are the two largest denominations of currency in circulation at that time.
After the demonetisation, the government introduced new Rs 500 and Rs 2000 currency notes were introduced.
Many people suffered during this demonetisation process. These include cash shortages, limited access to bank facilities, disruption in daily life, lack of inadequate payment methods, impact on lower-income groups etc.
During the introduction of the new Rs 2000 denomination, many rumours claimed that there was a spy chip inbuilt into the notes. However, government authorities rejected these allegations and crossed the false news.
RBI withdraws Rs 2000 notes from circulation
RBI withdraws Rs 2000 note from circulation, to remain legal tender; exchange facility available till Sept 30
— ANI Digital (@ani_digital) May 19, 2023