Are Rs 2,000 Banknotes Still Legal Tender? Here’s What The RBI Has to Say

The Reserve Bank of India (RBI) has made considerable progress in removing Rs 2,000 denomination banknotes from circulation, as per its recent update on Monday. The RBI's efforts led to the recovery of almost 98.15 per cent of these notes, proving that the withdrawal procedure is still effective.

Current Status of Rs 2,000 Notes in Circulation

A total of Rs 6,577 crore worth of Rs 2,000 banknotes remain in circulation as of January 31, 2025, accounting for approximately 1.85 per cent of the total value since the withdrawal announcement. This marks a significant decline from Rs 3.56 lakh crore, the value of Rs 2,000 banknotes in circulation when the withdrawal was first announced.

The RBI initially permitted deposits and swaps at all bank branches until October 7, 2023, to make the return of these currencies easier. After this, the procedure was limited to the 19 RBI Issue Offices nationwide that were established especially for this purpose. To enhance accessibility, from October 9, 2023, the RBI permitted individuals to mail their Rs 2,000 notes through India Post to any of the RBI Issue Offices for deposit into their bank accounts allowing people in remote areas to complete the process without having to visit a bank or RBI office in person.

Are Rs 2,000 Notes Still Legal Tender?

Despite a significant portion of Rs 2,000 banknotes being returned, the Reserve Bank of India (RBI) has confirmed that these notes remain legal tender. The RBI's continuous withdrawal procedure may be an indication of its attempts to limit the quantity of high-value currency notes in circulation.

As part of the demonetisation effort, the Rs 2,000 notes were launched in 2016 to alleviate an unexpected cash shortage. The use of Rs 2,000 notes steadily declined as notes of lower value became more accessible. The RBI decided to phase them out as part of its efforts to maintain a more efficient and effective monetary system, under its Clean Note Policy to ensure the circulation of good-quality currency.