The Reserve Financial institution of India (RBI) will withdraw Rs 2,000 denomination banknotes that have been in circulation since 2016. The central financial institution talked about a number of causes that influenced its choice to withdraw the forex notes.
Citing knowledge from a report titled ‘India Digital Funds Annual Report’, the RBI mentioned using the Unified Funds Interface (UPI) and digital funds elevated tremendously in the previous couple of years. Cost modes like UPI, Credit score, Debit playing cards, Cell and Pay as you go playing cards processed 87.92 billion transactions value Rs 14.92 lakh crore in 2022 alone.
The Reserve Financial institution of India mentioned the choice is part of its ‘Clear Notice Coverage’ to make sure the supply of high-quality financial institution notes to individuals. The vast majority of the Rs 2,000 denomination was issued earlier than March 2017 and “reached its estimated life-span of four-five years”, the RBI mentioned.
“About 89 per cent of the Rs 2,000 denomination banknotes have been issued earlier than March 2017 and are on the finish of their estimated lifespan of four-five years. The entire worth of those banknotes in circulation declined from Rs 6.73 lakh crore at its peak of March 31, 2018 (37.3 per cent of notes in circulation) to Rs 3.62 lakh crore constituting solely 10.8 per cent of notes in circulation on March 31, 2023,” the RBI mentioned.
The choice additionally goals to rationalise the forex construction and make sure the availability of decrease denominations available in the market.
Terming it as a ordinary follow adopted by the RBI, the central financial institution mentioned the same choice was undertaken for the withdrawal of notes from circulation in 2013-2014. In January 2014, the RBI utterly withdrew all forex notes issued earlier than 2005.
The notes will likely be progressively pulled out and can proceed to stay authorized tender. The RBI has supplied a window till September 30 for the general public to both deposit or trade their banknotes. The deadline will be prolonged provided that the necessity arises, sources advised Ednbox.