In this article we have discussed the various reasons and impacts of decision to withdraw Rs2000 currency note from the market.
Why in News?
The Reserve Bank of India (RBI) recently made a announcement to withdraw the Rs 2000 denomination banknotes from circulation. However, the Bank also said that the, existing notes will continue to remain as a legal tender, and the public can use these notes as a medium of exchange.
What is the possible reason of withdrawal?
The note of Rs 2000, introduced in November 2016 under section 24(1) of The RBI Act, 1934. The primary objective of the introduction was to meet the currency demand. Which emerges out due to the demonetisation of currency notes of Rs 500 and Rs 1000. With the pessage of time, the demand of cash was meet and the furthur printing of further notes of Rs 2000 notes was stopped in 2018-19.
Is the current denomination in ues?
The currency notes of Rs 2000 denomination is not in common use. However, there is adequate stock of banknotes in other denominations in order to meet the gap. The government in pursuance of the Clean Note Policy, of the RBI has decided to withdraw Rs 2000 note.
What is the Clean Note Policy?
The overall objective of the Clean Note Policy is to provide good quality currency notes and coins to the public. The Notes should have better security features, it also includes the withdrawl of soiled notes out of circulation. Prior to this, the RBI, also decided to withdraw all currency banknotes prior to 2005, as they had fewer security features. But, the current printed notes have high standard security features. These notes have withdraw gradually from the market with time.
What is the limit of exchange?
One can exchange of Rs 2000 currency notes up to a limit of 20,000 at a single time. Person willing to exchange notes need not to have a bank account, as against the earlier provision. The exchange process can be made through multiple ways, like through business correspondence. However, there is no restrictions on exchange through bank deposite. One only needs to follow applicable statutory/regulatory requirements.