The Reserve Bank of India on Friday said that it has decided to withdraw Rs 2,000 notes from circulation, saying that evidence showed the denomination was not being commonly used for transactions.

In a statement, the central bank said that Rs 2,000 denomination will remain legal tender but asked people to exchange or deposit them in their accounts by September 30.

The facility to exchange the notes will be available from May 23 and will have a limit of up to Rs 20,000 at a time, the Reserve Bank of India said.

“The stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public,” the statement added.

The Narendra Modi-led government had introduced Rs 2,000 notes after the November 2016 demonetisation move when Rs 500 and Rs 1,000 denominations were abruptly withdrawn to fight corruption. Experts believe that this move was destructive for the economy as well as large sections of the population, some of which are still reeling from its effects.

In 2019, the central bank had reduced the printing of Rs 2,000 notes to a minimum.

On Friday, the Reserve Bank of India asked banks to stop issuing Rs 2,000 denomination notes with immediate effect.

The central bank said that the objective of introducing Rs 2,000 notes was met once banknotes in other denominations became available in adequate quantity.

“About 89% of the Rs 2,000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life-span of 4-5 years,” the central bank said. “The total value of these banknotes in circulation has declined from Rs 6.73 lakh crore at its peak as on March 31, 2018, to Rs 3.62 lakh crore constituting only 10.8% of notes in circulation on March 31, 2023.”

‘Typical of our self-styled vishwaguru’: Congress

The Congress criticised the prime minister over the decision to withdraw Rs 2,000 notes, saying the move was “typical of our self-styled vishwaguru” and his method of “first act, second think”.

Congress leader Pawan Khera said the demonetisation exercise of 2016 has come back to haunt India once again. “The greatly propagated move of demonetisation continues to be a monumental disaster for this nation,” he added. “The PM sermoned the nation on the benefits of the new 2,000 notes, today when the printing is stopped what happened to all those promises?”