The Central Bank stated in a statement that the RBI’s Clean Note Policy aims to give citizens high-quality currency notes and coins while removing worn-out notes from circulation.
The RBI has urged banks to avoid recycling any worn-out notes they receive by only providing the public with clean, high-quality notes.
To do this, the apex bank has equipped all of its offices that deal with currency with fast Currency Verification and Processing Systems (CVPS) devices. These devices could process 50,000–60,000 notes per hour, shredding and compacting old notes in the process. Less than three years after its launch, in 2018–19, the RBI already ceased producing new notes. According to data released by the RBI last week, the value of Rs 2,000 notes in circulation has almost halved from Rs 6.73 trillion in 2018 to Rs 3.62 trillion as of March 31, 2023.
Data on the RBI website show that the percentage of these notes decreased from 2.4% in 2020 to 1.6% in 2022.
The rationale for the RBI’s statement is that there is now enough supply of lower denominations to suit the country’s financial needs. These notes were first introduced to facilitate quick cash exchange during demonetisation.
The RBI requested that people stop using the Rs 2,000 notes. People have been instructed to deposit their notes or trade them in for smaller ones. You can deposit/exchange up to Rs 20,000 at once.
The central bank anticipates that by the end of September, all Rs 2,000 notes in circulation would be returned to RBI, according to RBI governor Shaktikanta Das on Monday. The quantity of returned notes will be taken into consideration when making further decisions.
In 2013–14, the RBI withdrew all notes issued before 2005, taking similar action. The choice was made in an effort to stop the widespread use of fake currency.