Why RBI withdraw ₹2000 Bank note from circulation ?

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The Reserve Bank of India (RBI) on May 19 decided to withdraw ₹2,000 denomination banknotes from circulation in pursuance of its “Clean Note Policy”. However the ₹2,000 notes will continue to be legal tender. A similar withdrawal of notes from circulation was undertaken in 2013-2014.

In a reminder of the demonetisation days when the banking channel was overwhelmed by the massive crowd thronging into the branches to exchange banknotes, the decision to withdraw ₹2,000 notes is also likely to strain the system besides creating anxiety and inconvenience to the public.

The central bank has advised the public to deposit ₹2,000 notes into their bank accounts and/or exchange them into banknotes of other denominations at any branch. 



“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,” the RBI said. 

The ₹2,000 banknote was introduced in November 2016 “primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of legal tender status of all ₹500 and ₹1,000 banknotes in circulation at that time,” the banking regulator said.



₹20,000 limit

For operational convenience and to avoid disruption of regular activities of banks, exchange of ₹2,000 notes into banknotes of other denominations can be made up to a limit of ₹20,000 at a time at any bank starting from May 23, 2023.

To complete the exercise in a time-bound manner and to provide adequate time to the members of public, all banks have been directed to provide deposit and/or exchange facility for ₹2,000 notes till September 30, 2023.

The printing of ₹2,000 notes was stopped in 2018-19. The RBI said about 89% of the ₹2,000 notes 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 ₹6.73 lakh crore at its peak as on March 31, 2018 [37.3% of notes in circulation] to ₹3.62 lakh crore, constituting only 10.8% of notes in circulation on March 31, 2023,” the RBI said

All you need to know about :

  • What is Clean Note Policy?

It is a policy adopted by RBI to ensure availability of good quality banknotes to the members of public.


  • Does the legal tender status of ₹2000 banknotes remain?

Yes. The ₹2000 banknote will continue to maintain its legal tender status.


  • Can ₹2000 banknotes be used for normal transactions?

Yes. Members of the public can continue to use ₹2000 banknotes for their transactions and also receive them in payment. However, they are encouraged to deposit and/or exchange these banknotes on or before September 30, 2023.

  • Is there an operational limit on the amount of ₹2000 banknotes that can be exchanged?

Members of the public can exchange ₹2000 banknotes upto to a limit of ₹20,000/- at a time.

  • Is it necessary to be a customer of the bank to exchange ₹2000 banknotes from its branches?

No. A non-account holder also can exchange ₹2000 banknotes up to a limit of ₹20,000/- at a time at any bank branch.

  • Is there any fee to be paid for the exchange facility?

No. The exchange facility shall be provided free of cost.

  •  What if someone needs more than ₹20,000/- cash for business or other purposes?

Deposit into accounts can be made without restrictions. The ₹2000 banknotes can be deposited into bank accounts and cash requirements can be drawn thereafter, against these deposits. Ahmedabad, Bangalore, Belapur, Bhopal, Bhubaneswar, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Jammu, Kanpur, Kolkata, Lucknow, Mumbai, Nagpur, New Delhi, Patna and Thiruvananthapuram

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