NEW DELHI: In the latest announcement, the Reserve Bank of India (RBI) has emphasized that the Rs.2,000 denomination banknote will lose its monetary value after September 30, 2023. Failure to exchange these notes at any authorized bank will render them valueless.

This clarification from the RBI comes swiftly in response to earlier reports hinting at a possible extension of the September 30 deadline for returning Rs.2,000 notes until the end of October.

The significant move to withdraw Rs.2,000 notes from circulation, which was initiated on May 19, allowed a grace period of nearly four months for individuals to deposit or exchange these notes. The RBI's initial deadline of September 30, which is today, stands firm. For those who have not yet complied, today presents the last opportunity, as banks will remain open due to the occurrence of the fifth Saturday.

Individuals are urged to visit their nearest bank branch to complete the exchange or deposit process. Additionally, exchange or deposit services for Rs.2,000 notes are available at bank branches and regional branches of the RBI. Even non-account holders have the option to exchange Rs.2,000 banknotes, with a limit of Rs.20,000 per transaction, at any bank branch.

Post-September 30 Scenario:

After September 30, while the Rs.2,000 notes will technically remain legal tender, they will no longer be accepted for regular transactions and can only be exchanged directly with the RBI.

As of September 2, the RBI reported that a substantial 93 percent of the Rs.2,000 banknotes in circulation on May 19 had been returned to banks. Data from major banks indicated that out of the total Rs.2,000 denomination banknotes received back from circulation, approximately 87 percent took the form of deposits, while the remaining 13 percent were exchanged for other denominations.

However, media report has highlighted that nearly 240 billion rupees, equivalent to $2.9 billion, worth of Rs.2,000 notes are still in circulation. Despite the majority of the 3.56 trillion rupees being accounted for, as of September 1, a notable 7 percent of these notes were still in circulation.

On May 19, the RBI decided to withdraw the Rs.2,000 denomination banknotes from regular circulation while maintaining their legal tender status. Banks were instructed by the RBI to cease issuing these banknotes immediately.

The introduction of the Rs.2,000 denomination banknote in November 2016 was primarily aimed at addressing the immediate currency requirements of the economy following the withdrawal of legal tender status for all Rs.500 and Rs.1,000 banknotes that were in circulation at that time.

The objective of introducing Rs.2,000 banknotes was successfully met once an adequate quantity of banknotes in other denominations became available. Consequently, the printing of Rs.2,000 banknotes was discontinued during the fiscal year 2018-19.

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