Rs 2,000 Notes In Circulation Fall Sharply As Withdrawal Nears Completion

The value of Rs 2,000 denomination banknotes that are still in circulation has fallen to Rs 5,609 crore as of January 31, 2026, indicating that the withdrawal exercise is at an advanced stage. This is a drastic reduction from Rs 3.56 lakh crore that was out in circulation on May 19, 2023, when the Reserve Bank of India (RBI) announced the withdrawal of the denomination.

According to RBI data, 98.42 per cent of the Rs 2,000 notes which were in circulation at the time of the announcement have since been reabsorbed into the banking system. The rest is still in circulation, held by individuals or entities, but still legally tender.

Scale Of Decline Since Announcement

When the withdrawal was announced in May 2023, Rs 2,000 notes accounted for a significant share of the total value of currency in circulation. Over the following two and a half years, this share steadily fell as facilities for deposits and exchanges allowed the notes to be returned.

The latest figure of Rs 5,609 crore indicates that the volume of high-value notes outside the formal banking system has increased marginally. In other terms, less than 2 per cent of the original value has not been returned, indicating better compliance with the withdrawal process.

This decline, however, has been gradual and not sudden, with periodic updates from the central bank indicating the continuous reduction in outstanding notes over the years.

Facilities On Deposit/Exchange

The facility for depositing or exchanging Rs 2,000 banknotes at bank branches in the entire country was available till 7th October, 2023. After this deadline, the general bank branches would no longer accept these notes for exchange or deposit.

However, the possibility of exchange or deposit of the notes has not been completely withdrawn. Since 19th May 2023, holders can change Rs 2,000 notes at 19 designated issue offices of the RBI. From October 9, 2023 onwards, these issue offices also started accepting the notes for direct deposit into the bank accounts.

Apart from physical visits, individuals and entities have been given the option to send Rs 2,000 banknotes via India Post from any post office to an RBI issue office. The amount is then credited to the bank account of the sender and offers an alternative to those who might not be able to visit an issue office physically.

Legal Tender Status

Despite being withdrawn from circulation, Rs 2,000 banknotes remain legal tender. This means that these notes have not been demonetised in entirety, and still have its face value under the law.

The withdrawal exercise has concentrated on the withdrawal of the denomination from active circulation rather than on cancelling the legal status. As a result, the holders are still entitled to deposit or exchange the notes through the facilities provided by the central bank.

The retention of the legal tender status differentiates the process from the past currency withdrawal exercises in which validity was completely stopped.

The sharp decrease in outstanding Rs 2,000 notes suggests that the majority of the holders have already taken necessary action within the available timelines. With just Rs 5,609 crore still unreturned, the denomination now has a minuscule share in the total currency in circulation.