In a statement issued on Friday, the central bank said: “In accordance with the Reserve Bank of India’s “Clean Note Policy,” it has been decided to remove the denomination 2000 banknotes from circulation. The 2000-denomination bills will still be accepted as legal money. All banks must offer a deposit and/or exchange service for 2000-yen banknotes until September 30, 2023, in order to finish the exercise on schedule and give the people enough time.

The RBI gave the following justification for the decision: “About 89% of the banknotes in the denomination of Rs. 2000 were issued prior to March 2017 and are nearing the end of their expected life-span of 4-5 years. The total value of these banknotes in circulation has decreased from its peak of 6.73 lakh crore as of March 31, 2018 (37.3% of Notes in Circulation) to its lowest point of 3.62 lakh crore as of March 31, 2023, which represents only 10.8% of Notes in Circulation. Additionally, it has been noted that transactions involving this denomination are uncommon. Additionally, the supply of banknotes in other denominations is still sufficient to meet the public’s need for currency.

People can deposit Rs 2,000 banknotes into their accounts or exchange them for notes of other denominations at any bank branch, according to the RBI. “Deposit into bank accounts can be made in the usual manner, that is, without restrictions and subject to extant instructions and other applicable statutory provisions,” it stated.

The central bank said, “Starting from May 23, 2023, exchanges of Rs 2000 banknotes into banknotes of other denominations can be made up to a limit of 20,000/- at a time at any bank, ensuring operational convenience and avoiding disruption of regular activities of bank branches.”  Additionally, starting on May 23, the 19 Regional Offices of the RBI with issuing divisions will offer the ability to swap Rs 2,000 bank notes up to the maximum of Rs 20,000 at a time.