RBI will stop printing new currency notes worth 2,000 yet they will still be accepted as payment.
The RBI declared on May 19, 2023, that it had made the decision to immediately stop issuing notes of Rs. 2,000.
Up to September 30, 2023, the Rs 2,000 notes that are now in use will remain legal money and can be deposited or exchanged at any bank branch.
The action will differ from the 2016 demonetization since it will be systematic and time-bound, and it won’t influence the overall supply of currency.
Because these notes are simpler to stockpile and counterfeit, the primary goal of the withdrawal of Rs 2,000 notes is to combat black money and tax evasion.
As the payment system has become more digitalized and the percentage of Rs 2,000 notes in circulation has decreased from 37.3 percent in 2018 to 10.8 percent in 2023, the effect on the economy and equities markets is anticipated to be negligible.
How will this affect the common people?
According to studies, the general people will not immediately be impacted by the withdrawal of Rs 2,000 notes because they will have the time to convert them12. They have until September 30, 2023, to deposit or exchange their notes at any bank branch. Additionally, the RBI has stated that these notes will continue to be acceptable for use in transactions and payments3. However, some experts have cautioned that the change may put those who rely on cash transactions through hardship and inconvenience, particularly in rural areas and informal industries.
Why did the RBI stop printing Rs 2,000 notes in 2018-19?
After demonetization, which removed all Rs 500 and Rs 1,000 notes from circulation, the main goal of the introduction of Rs 2,000 notes in November 2016 was to satisfy the cash needs of the economy.
The printing of Rs. 2,000 notes was no longer required as there were sufficient supplies of banknotes in other denominations.
The majority of the Rs 2,000 notes were printed before March 2017 and were nearing the end of their 4-5 year expected lifespan.
The Modi administration was concerned that hoarding, tax fraud, and money laundering were being done with the high-denomination currency note.
The circulation of Rs 2,000 notes decreased from 37.3% in 2018 to 10.8% in 2023 as they were not frequently utilized for transactions.
RBI will stop printing new currency notes
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