Rs 2,000 withdrawn: Can Rs 2,000 banknotes be used for normal transactions?

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In an unexpected move, the Reserve Bank of India on Friday, May 19, 2023, announced that it has withdrawn Rs 2,000 banknotes from circulation. However, it said that the Rs 2,000 denomination will continue to be legal tender.After the Reserve Bank of India announcement, many customers are worried if they can still use the Rs 2000 notes for normal transactions.

Here is what RBI has to say: “Yes. Members of the public can continue to use Rs 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.”
Until September 30, 2023, all banks will offer the facility to deposit money into accounts or exchange it for Rs 2000 banknotes.

If you want to deposit the amount there is no restriction on it, if you wish to exchange for other denominations, you will have to wait till May 23, 2023 and it can be exchanged up to a limit of Rs 20,000/- at a time at any bank branch.

The Reserve Bank of India has advised banks to stop issuing ?2000 denomination banknotes with immediate effect.

Here are important FAQs from RBI about the withdrawal of the Rs 2,000 banknotes one should know.Is there a limit on deposit of Rs 2000 banknotes into a bank account?
Deposit into bank accounts can be made without restrictions subject to compliance with extant Know Your Customer (KYC) norms and other applicable statutory / regulatory requirements.

Is there an operational limit on the amount of Rs2000 banknotes that can be exchanged?
Members of the public can exchange ?2000 banknotes upto to a limit of Rs 20,000/- at a time.

Can Rs 2000 banknotes be exchanged through Business Correspondents (BCs)?
Yes, exchange of Rs 2000 banknotes can be made through BCs upto a limit of Rs 4000/- per day for an account holder.

From which date will the exchange facility be available?
To give time to the banks to make preparatory arrangements, members of the public are requested to approach the bank branches or ROs of RBI from May 23, 2023 for availing exchange facility.

Is it necessary to be a customer of the bank to exchange Rs 2000 banknotes from its branches?
No. A non-account holder also can exchange Rs2000 banknotes up to a limit of Rs 20,000/- at a time at any bank branch.

What if someone needs more than Rs20,000/- cash for business or other purposes?
Deposit into accounts can be made without restrictions. The Rs 2000 banknotes can be deposited into bank accounts and cash requirements can be drawn thereafter, against these deposits.

Is there any fee to be paid for the exchange facility?
No. The exchange facility shall be provided free of cost.

Will there be special arrangements for senior citizens, persons with disabilities, etc. for exchange and deposit?
Banks have been instructed to make arrangements to reduce inconvenience to the senior citizens, persons with disabilities, etc., seeking to exchange/deposit Rs 2000 banknotes.

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