The deadline for depositing/exchanging Rs 2,000 currency notes is fast approaching, with the Reserve Bank of India set to conclude the acceptance of these high-value banknotes on September 30.
The RBI had announced the withdrawal of Rs 2,000 notes from circulation in May as part of its ‘clean note policy.’
While the RBI hasn’t explicitly stated that Rs 2,000 notes will cease to be legal tender after the deadline, it’s clear that the central bank intends to withdraw these notes from circulation as soon as possible.
So, what happens after September 30?
When announcing the withdrawal, the RBI mentioned that it would determine the future status of Rs 2,000 notes based on the quantity returned to/deposited in banks.
As of September 1, the RBI reported, “The total value of Rs 2,000 banknotes received back from circulation is Rs 3.32 lakh crore up to August 31, 2023.”
Furthermore, the RBI noted that as of August 31, 2023, only Rs 0.24 lakh crore worth of Rs 2,000 banknotes were in circulation. This indicates that 93 percent of the Rs 2,000 notes in circulation as of May 19, 2023, have been returned to banks through exchange or account deposits.
It’s likely that more deposits have been made during September, further reducing the amount in circulation. The RBI is expected to provide an update on October 1, which may include clarification on the fate of the remaining Rs 2,000 notes still in circulation.
Given that over 90 percent of these notes have been returned, there’s a high probability that the RBI will announce a date when these currency notes will no longer be considered legal tender. However, an official announcement from the RBI is awaited for a definitive answer.