June 6, 2023: The Reserve Bank of India (RBI) has given people in the country time to deposit or exchange Rs 2,000 currency notes by September 30, 2023. This over four-month window was announced as part of the apex bank’s clear-note policy under which the RBI is taking back from circulation the highest-value currency notes so far in India.
The apex bank has categorically said that till that deadline the Rs 2,000 currency notes will remain legal tender. That begs the question, will these notes become invalid after that period?
According to RBI governor Shaktikanta Das, the RBI will decide on the legal status of these notes once the deadline for exchange/deposit nears end. “We will wait how many notes are coming… And as we approach September 30, we will decide at that stage,” the RBI governor told the media on May 22, 2023.
“It will be our endeavour to address the difficulties of the people and to complete the entire process in a smooth manner,” he said adding that the RBI was factoring in the difficulties which might be faced by people on long foreign visits or living abroad on work visas.
Citing highly placed sources, a report in financial daily Business Standard also says the Rs 2,000 notes might remain legal tender till the end of 2023.
This is being done “to avoid any inconvenience that was caused in 2016 when the legal tender status of then Rs 500 and Rs 1,000 notes was ended immediately as part of the demonetisation exercise”.
What is legal tender?
Legal tender is recognised form of money that can be used meet any financial obligation. In that sense, banknotes issued by the Reserve Bank of India are legal tenders throughout India. These can be used for making payments or settling debts.
See also: FAQs on how to use RBI’s Rs 2,000 note exchange/deposit facility
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