RBI says 98.18% of Rs 2,000 notes returned

The Reserve Bank of India (RBI) has announced that as of February 28, 2025, a massive 98.18% of ₹2,000 denomination banknotes have been returned to the banking system, leaving only ₹6,471 crore worth of these notes still in public circulation.

Majority of ₹2,000 Notes Returned

The RBI's latest update highlights the near-complete withdrawal of ₹2,000 notes, a process that began in May 2023, when the central bank announced the decision to withdraw these high-value notes from circulation.

Initially, the public was given time to either exchange or deposit ₹2,000 notes at banks, with a September 30, 2023, deadline. Later, this deadline was extended to October 7, 2023. Beyond that, RBI issue offices and designated centers, including India Post, continued to accept these notes for exchange.

Background: Why ₹2,000 Notes Were Withdrawn

The ₹2,000 note was first introduced in November 2016 following the demonetization of ₹500 and ₹1,000 notes to quickly restore liquidity in the economy. However, over time, the RBI observed a declining usage of ₹2,000 notes in regular transactions, as smaller denomination notes became more widely available.

Additionally, concerns over the misuse of ₹2,000 notes in unaccounted cash transactions were also cited as a reason for their withdrawal. The RBI clarified that while the notes remained legal tender, they were being phased out to streamline the country's currency system and promote digital transactions.

What Happens to the Remaining ₹2,000 Notes?

With only ₹6,471 crore worth of ₹2,000 notes still in circulation, the RBI continues to allow individuals and entities to exchange or deposit them at select RBI offices across the country. The public is encouraged to return any remaining notes to the RBI to ensure a smooth transition.

Economic Impact of the Withdrawal

The withdrawal of ₹2,000 notes has had minimal disruption to the economy, as India has already witnessed a sharp increase in digital transactions and the availability of lower denomination currency notes. The banking system has effectively absorbed the returned notes, and cash transactions have continued without any major liquidity issues.

Experts believe this move is part of the RBI’s broader strategy to reduce cash-based transactions and encourage a digital and formalized economy.

Final Call for Remaining ₹2,000 Notes

As the RBI reports a 98.18% return rate, it is expected that the remaining ₹2,000 notes will gradually be phased out completely in the coming months. The public is advised to exchange or deposit any leftover notes as soon as possible, as their availability in regular transactions continues to decline.

This marks a successful conclusion to the RBI’s initiative to withdraw ₹2,000 notes while ensuring a smooth transition for the public and financial institutions.