RBI says 98.44% of Rs 2,000 notes returned; currency remains legal tender

The Reserve Bank of India (RBI) has announced that 98.44 per cent of the Rs 2,000 banknotes in circulation have been returned, marking a significant step in its ongoing currency withdrawal exercise.

RBI’s withdrawal of Rs 2,000 notes

The Central Bank had first announced the withdrawal of the Rs 2,000 denomination on May 19, 2023. At the time, the total value of these notes in circulation was Rs 3.56 lakh crore. As of February 28, 2026, this has dropped dramatically to Rs 5,551 crore, the RBI said in a statement.

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Exchange and deposit facilities

To facilitate the process, RBI issue offices have been providing exchange and deposit facilities since May 19, 2023. From October 9, 2023, individuals and entities could also send their Rs 2,000 notes via India Post for credit to their bank accounts. Previously, the facility for depositing or exchanging these notes was available at all bank branches until October 7, 2023.

Rs 2,000 notes remain legal tender

Despite the withdrawal, the RBI clarified that Rs 2,000 banknotes continue to be legal tender.

Why was Rs 2,000 notes withdrawn?

The Rs 2,000 note was introduced in November 2016 to meet immediate currency requirements following the demonetisation of Rs 500 and Rs 1,000 notes. However, with sufficient availability of other denominations and the majority of Rs 2,000 notes reaching the end of their estimated 4–5 year lifespan, the RBI decided to withdraw them in line with its “Clean Note Policy.”

"The objective of introducing Rs 2000 banknotes was met once banknotes in other denominations became available in adequate quantities. Therefore, printing of Rs 2000 banknotes was stopped in 2018-19," RBI had said in a release.

"It has also been observed that this denomination is not commonly used for transactions. Further, the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public. In view of the above, and in pursuance of the “Clean Note Policy” of the Reserve Bank of India, it has been decided to withdraw the Rs 2000 denomination banknotes from circulation," RBI said.

Circulation and peak value data

Data shows that about 89 per cent of the Rs 2,000 notes were issued prior to March 2017. The total value of these notes peaked at Rs 6.73 lakh crore on March 31, 2018, but had already declined to Rs 3.62 lakh crore by March 31, 2023, constituting only 10.8 per cent of notes in circulation.

Bank guidelines for exchange

In 2023, banks were advised to stop issuing Rs 2,000 notes with immediate effect. Exchange of notes at bank branches was permitted up to Rs 20,000 at a time, while RBI issue offices continued to provide facilities beyond this limit.

RBI’s emphasis on a clean currency system

The RBI emphasised that the Rs 2,000 notes remain legal tender and the withdrawal process is part of its efforts to maintain a clean and efficient currency system, similar to prior withdrawals carried out in 2013–14.

With inputs from agency