RBI scrapped Rs 2,000 notes, will remain legal tender

Some opposition parties have  criticised the Centre over the decision to  withdraw Rs 2,000 denomination banknotes from circulation. In a statement released on Friday, the central bank stated that in pursuance of the “Clean Note Policy” of the Reserve Bank of India, it has decided to withdraw the Rs 2000 denomination banknotes from circulation. The central bank added that in order to ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of Rs 2000 banknotes into banknotes of other denominations can be made upto a limit of Rs 20,000/- at a time at any bank starting from May 23, 2023.

₹2000 Denomination Banknotes – Withdrawal from Circulation; Will continue as Legal Tenderhttps://t.co/2jjqSeDkSk

— ReserveBankOfIndia (@RBI) May 19, 2023

Additionally, the facility for exchange of Rs 2,000 bank notes up to the limit of Rs 20,000 at a time will be provided at the 19 Regional Offices of the RBI having issue departments from May 23. Explaining the move, the RBI said that About 89% of the Rs 2000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life span of 4-5 years. The total value of these banknotes in circulation has declined from Rs 6.73 lakh crore at its peak as on March 31, 2018 (37.3% of Notes in Circulation) to Rs 3.62 lakh crore constituting only 10.8% of Notes in Circulation on March 31, 2023. RBI added that it has also been observed that this denomination is not commonly used for transactions. 

In her reaction,West Bengal chief minister Mamata Banerjee termed it as a ‘billion dollar dhokha (fraud). CM Banerjee recalled the ‘sufferings’ people endured due to demonetisation in 2016 that cannot be forgotten. Congress general secretary Jairam Ramesh has called the move was "typical of our self-styled vishwaguru" and his method of "first act, second think".