India Withdraws Top Denomination

The Reserve Bank of India (RBI) has announced the withdrawal of the 2,000 rupee banknote from circulation, albeit that it will continue to be legal tender. Even so, the public is being urged to exchange the notes before 30 September, marking the end of this denomination which was only introduced in 2016.

The reason for the introduction of the note in the first place was to quickly meet the needs of currency in the wake of the overnight demonetisation of the old 500 and 1,000 rupee notes in November 2016. The former was replaced, the latter was not.

According to the RBI, the objective of fulfilling demand having been met, and with the availability of banknotes in other denominations in adequate quantities, production of the 2,000 rupee was stopped in 2018-19. Around 89% of the notes were issued prior to March 2017 and they are coming to the end of their estimated lifespan of 4-5 years, even though they are used primarily as a store of value, rather than for transaction purposes.