How to exchange Rs.2,000 banknotes between 23rd May to 30th September 2023? Whether the existing Rs.2,000 currency notes are legal tender or not? What is the deadline to exchange?
In a surprising move, RBI today (19th May 2023) announced that it is withdrawing Rs 2,000 Bank notes from circulation.
The Rs.2,000 denomination banknote was introduced in November 2016 under Section 24(1) of RBI Act, 1934 primarily with the objective to meet the currency requirement of the economy in an expeditious manner after withdrawal of the legal tender status of all ?500 and ?1000 banknotes in circulation at that time. With fulfilment of that objective and the availability of banknotes in other denominations in adequate quantities, printing of Rs.2,000 banknotes was stopped in 2018-19. A majority of the Rs.2,000 denomination notes were issued prior to March 2017 and are at the end of their estimated life-span of 4-5 years. It has also been observed that this denomination is not commonly used for transactions. Further, the stock of banknotes in other denominations continue to be adequate to meet the currency requirement of the public.
In view of the above, and in pursuance of the “Clean Note Policy” of the Reserve Bank of India, it has been decided to withdraw the Rs.2,000 denomination banknotes from circulation.
How to exchange Rs.2,000 banknotes between 23rd May to 30th September 2023?
Let us now understand the process of how to exchange Rs.2,000 notes after 23rd May 2023.
- The Reserve Bank of India has advised banks to stop issuing Rs.2,000 denomination banknotes with immediate effect.
- The banknotes in Rs.2,000 denomination will continue to be legal tender. However, whether any public will accept it? Sadly NO. Hence, you have no option but to return to the banks or to the designated RBI offices.
- Effective from 23rd May 2023, the exchange of Rs.2,000 banknotes into banknotes of other denominations can be made up to a limit of Rs.20,000/- at a time at any bank starting from May 23, 2023. Hence, the maximum daily exchange in any bank branch is ONLY Rs.20,000 at once. There is no such upper limit set by RBI. Each time you try to exchange at the cash counter of the bank, the maximum exchange allowed is Rs.20,000 per person.
- THE DEADLINE TO EXCHANGE RS.2,000 NOTES IS SEPTEMBER 30, 2023.
- You have to finish a normal KYC process for such an exchange. As per another guideline issued by RBI, it is clearly mentioned as “Deposit of Rs.2,000 banknotes into accounts maintained with all banks can be made in the usual manner, that is, without restrictions and subject to compliance with extant Know Your Customer (KYC) norms and other applicable Statutory requirements. The banks shall also be required to comply with Cash Transaction Reporting (CTR) and Suspicious Transaction Reporting (STR) requirements, where applicable.”.
- All banks and all their branches must provide this facility of exchange Rs.2,000 notes.
- For people residing in remote/ unbanked areas, banks have to provide mobile vans, if necessary.
- Banks will provide special arrangements to reduce inconvenience to senior citizens, persons with disabilities, and women seeking to exchange/deposit Rs.2,000 notes.
- The facility for exchange will be available also at the 19 Regional Offices (ROs) of RBI having Issue Departments until September 30, 2023.
- There is no such maximum limit per person specified. However, deposits into bank accounts can be made without restrictions subject to compliance with extant Know Your Customer (KYC) norms and other applicable statutory/regulatory requirements.
- You do no need to be a customer of the bank. You can visit any bank and exchange your Rs.2,000 notes. However, one-time limit of Rs.20,000 is applicable.
What if banks refuse to exchange your Rs.2,000 notes?
For redress of grievance in case of deficiency of service, the complainant / aggrieved customer may first approach the concerned bank. If the bank does not respond within a period of 30 days after lodging the complaint or if the complainant is not satisfied with the response/resolution given by the bank, the complainant can lodge the complaint under the Reserve Bank – Integrated Ombudsman Scheme (RB-IOS), 2021 at the Complaint Management System portal of RBI (cms.rbi.org.in).
I hope I have cleared the doubts of how to exchange Rs.2,000 notes after 23rd May 2023.
If one has to comply with KYC requirements even for “exchange” of Rs. 2000 notes, then, it is better to deposit the same into your bank account (which is by all means, now, KYC compliant) where there is no limit on deposit on per day basis. Why to undergo such hassles of exchange when you can deposit into your KYC compliant bank account.
Sad but this is how the government babus float the policies.