Rs 2,000 note withdrawal from circulation: This is not demonetisation 2.0, here’s why

The Reserve Bank of India (RBI) on Friday announced to withdraw the circulation of Rs 2,000 denomination banknotes. However, the notes will continue as legal tender. Introduced in 2016, the Rs 2,000 denomination notes have now been withdrawn from circulation keep various reasons into consideration. 

Although, this may remind people of the 2016 demonetisation when the central bank demonetised Rs 500 and Rs 1,000 denomination banknotes. But this is different. 

In 2016, the Rs 500 and Rs 1,000 denomination banknotes were demonetised, hence, could not be used as legal tender. But the Rs 2,000 denomination notes will continue to be legal tender till September 30, which is the last date for depositing or exchanging the banknotes.

Demonetisation meant that the banknotes could not be used for any transaction from the time of announcement but this time the Central Bank has withdrawn the Rs 2,000 denomination banknotes. People can use the Rs 2,000 notes for regular transactions till the last date given by RBI. Demonetisation has been implemented twice -1946 and 1978 – in the past.

As per RBI guidelines, the public can deposit or exchange the Rs 2,000 banknotes at any bank till September 30, 2023. 

Read: RBI decides to withdraw Rs 2000 notes: What is 'Clean Note Policy'?