According to a circular by the Reserve Bank of India, it has been announced that Rs 2,000 denomination currency notes will be taken out of circulation. Lets hear from finance influencer Neha Nagar's thoughts on this.
She is a CA dropout turned content creator, who covers finance, taxation & stock markets. With her massive Instagram following, she has achieved remarkable success.
According to a circular issued by the Reserve Bank of India on May 19, it has been announced that Rs 2,000 denomination currency notes will be taken out of circulation.
The central bank has instructed banks to offer deposit and/or exchange services for Rs 2,000 notes until September 30, 2023, as mentioned in a statement.
In a recent Reel, she says that the government has not banned the Rs 2,000 notes, but RBI has restricted their circulation. The RBI's decision is due to low usage.
We can deposit or exchange Rs 2,000 notes at banks until September 30th, with a Rs 20,000 limit per transaction. But what happens after September 30th?
She emphasizes that even after September 30th, the Rs 2,000 notes will still be considered legal tender.
Legal tender is recognized by courts as acceptable payment for debts, determined by each jurisdiction, effectively extinguishing the debt upon its use.
This decision was influenced by two factors: the low usage of these notes, and the "clean note policy," which aims to provide the public with high-quality banknotes.
The policy mandates banks & financial institutions to replace unfit or damaged notes with new ones, ensuring that currency notes meet the acceptable standards set by the RBI.