RBI withdraws Rs. 2000 notes from circulation: Will your 2000 notes become invalid after September 30?

The Reserve Bank of India (RBI) has decided to withdraw the Rs. 2000 denomination banknotes from circulation. But existing notes will continue to be legal tender, the RBI announced Friday (19 May).

The central bank has advised the public to deposit Rs. 2000 banknotes, which were introduced after Rs. 500 and Rs. 1000 notes were withdrawn during the demonetization exercise six years ago, into their bank accounts and /or exchange them into banknotes of other denominations at any bank branch.

Will your Rs. 2000 notes become invalid after September 30?

Rs. 2000 note will not become invalid even after September 30. Though the RBI wants people to complete the deposit/exchange of Rs 2000 notes by September 30, the notes will continue to remain legal tender in case someone fails to complete the deposit or exchange by this date, according to the Government. The exchange of Rs 2000 notes with banknotes of small denominations, can be done in any bank till September 30.

What happens if someone has a very large number of Rs. 2000 notes?

Technically, a person can seek multiple exchanges in packets of Rs. 20,000 at a time. However, this is expected to attract the attention of enforcement agencies and the Income-tax Department. Those holding large sums of money in Rs. 2000 notes are likely to find it difficult to exchange their money.

Is there any reason to panic for common citizens?

There is no reason to panic for honest citizens with legit sources for the Rs. 2,000 notes. There is enough time and facilities offered by the RBI to deposit or exchange these notes in bank branches or authorized RBI centers. There is time until September 30 for the public to do this.

Customers can exchange Rs. 2,000 notes worth Rs. 20,000 at a time starting Tuesday. Also, there is no restriction to deposit Rs. 2,000 notes in accounts for customers. The RBI has also permitted business correspondents (agents of banks) to exchange Rs. 2,000 notes up to a limit of Rs. 4,000 per day for account holders.

What should you do with the Rs. 2000 notes you have?

The RBI has advised people to “approach bank branches for deposit and/ or exchange” of these banknotes. “The facility for deposit into accounts and exchange for Rs. 2000 banknotes will be available at all banks until September 30, 2023,” the RBI has said. The facility for exchange will also be available until September 30 at 19 RBI Regional Offices that have Issue Departments.

What happens if someone has a very large number of Rs. 2000 notes?

Technically, a person can seek multiple exchanges in packets of Rs 20,000 at a time. However, this is expected to attract the attention of enforcement agencies and the Income-tax Department. Those holding large sums of money in Rs 2000 notes are likely to find it difficult to exchange their money.

Could there be a repeat of the demonetization chaos of 2016?

It is unlikely that bank branches will witness chaos and long queues like in 2016 this time. The printing of Rs. 2000 notes was stopped in 2018-19, and they are no longer commonly seen by the public — unlike the ubiquitous Rs. 500 and Rs. 1000 notes in 2016.

Also, the decision to withdraw Rs. 500 and Rs. 1000 notes was announced suddenly, taking the public by surprise. The exchange of Rs. 2000 notes will begin only on May 23, so banks and the public have sufficient time.