Rs 2000 note phase-out nearly complete, says RBI; 98% of notes returned to banks — All you need to know
Published on 01/11/2025 11:29 PM
The Reserve Bank of India (RBI) has confirmed that almost all Rs 2000 denomination notes have been returned to the banking system, marking the near completion of their gradual phase-out. The RBI’s latest data, released on October 31, 2025, shows that notes worth Rs 5,817 crore are still in circulation, down from Rs 3.56 lakh crore when their withdrawal was announced on May 19, 2023. This means 98.37 per cent of all Rs 2000 notes issued have now been returned. However, the central bank has reiterated that the denomination continues to be legal tender and can still be used or deposited in banks.
The facility to deposit or exchange Rs 2000 notes at commercial bank branches ended on October 7, 2023. Since then, individuals can exchange or deposit these notes only at the 19 RBI Issue Offices across the country.
From October 9, 2023, the RBI also began accepting Rs 2000 notes sent through India Post for direct credit into bank accounts, allowing people from any part of India to complete the process conveniently.
The RBI said the continued availability of these options ensures no inconvenience for the public, even though the denomination is being phased out of circulation.
The Rs 2000 note was introduced in November 2016 following demonetisation, aimed at addressing the currency shortage and facilitating high-value transactions. Over the years, however, the circulation of smaller denominations - mainly Rs 500 and Rs 200 - increased significantly, while the use of Rs 2000 notes in daily transactions declined.
By 2023, the RBI observed that these notes were being used more for storing cash than for routine payments. The decision to withdraw them was therefore part of the bank’s broader currency management strategy to ensure efficiency, transparency, and easier transaction handling.
The withdrawal marks a natural step towards a more digital and transparent financial ecosystem. With the rapid growth of UPI, QR-code payments, and online banking, reliance on cash - especially high-value notes has steadily declined. The move also aligns with India’s broader shift towards digital finance, where smaller denominations and electronic transfers now dominate both retail and business transactions.
Despite the sharp decline in circulation, the RBI has confirmed that Rs 2000 notes remain legal tender. Individuals holding them can deposit the notes at any of the 19 RBI Issue Offices or send them via India Post for credit into their bank accounts.
Officials have stressed that the process remains orderly, unlike the sudden withdrawal of high-value notes during demonetisation in 2016. The RBI’s phased approach ensured that the transition did not disrupt daily banking or business operations.
Ankit Kumar is a Senior Sub Editor at Zee Business. He covers international affairs, politics, climate change, business, finance and global elections. With experience acros