RBI Governor Sanjay Malhotra clarified on Thursday, July 11, 2025, that the Rs 2,000 currency notes, though no longer in circulation, will continue to be legal tender. This statement was made during a briefing to the Parliamentary Standing Committee on Finance, where he discussed the Indian economy's growth.
The Reserve Bank of India (RBI) had initially announced the withdrawal of Rs 2,000 notes from circulation on May 19, 2023. These notes were first introduced in November 2016, following the demonetization of Rs 500 and Rs 1,000 notes. The primary objective behind introducing the Rs 2,000 note was to quickly replenish the currency in circulation after the demonetization. Once that objective was met and banknotes of other denominations became adequately available, the printing of Rs 2,000 notes was stopped in 2018-19.
The RBI's decision to withdraw the Rs 2,000 notes was part of its "Clean Note Policy," which aims to provide citizens with good quality currency notes. The central bank had observed that the Rs 2,000 denomination was not commonly used for transactions, and there were sufficient stocks of other denominations to meet the public's currency needs.
Following the announcement of the withdrawal, the RBI set a deadline of September 30, 2023, for the public to deposit or exchange their Rs 2,000 notes at bank branches. This deadline was later extended to October 7, 2023. Even after this period, individuals could still exchange the notes at the 19 RBI Issue Offices up to a limit of Rs 20,000 at a time or tender them for credit to their bank accounts.
As of July 1, 2025, Rs 2,000 denomination notes worth Rs 6,099 crore remained in circulation, despite the RBI's efforts to withdraw them. By December 2024, the RBI reported that 98.08% of the Rs 2,000 notes in circulation had been returned. The total value of these notes had decreased from Rs 3.56 lakh crore on May 19, 2023, to Rs 6,839 crore as of November 29, 2024. The withdrawal of Rs 2,000 notes led to a deceleration in currency-in-circulation growth. For the week ending February 9, 2024, the growth in currency in circulation was 3.7%, down from 8.2% the previous year. Commercial banks also reported double-digit growth in deposits in January 2024, which was attributed to the withdrawal of Rs 2,000 notes.
RBI Governor Shaktikanta Das had previously stated that the withdrawal of Rs 2,000 notes would not negatively impact the Indian economy. He noted that over two-thirds of the notes in circulation had already returned to the system since the announcement of the clean note policy.
During the recent Parliamentary Standing Committee on Finance meeting, one Member of Parliament raised concerns about counterfeit currency, noting the seizure of 1.12 lakh fake Rs 500 notes. The RBI governor acknowledged the issue and assured the committee that both the central bank and the government are committed to curbing counterfeit currency.
