India announces surprise withdrawal of highest-value banknotes

India is withdrawing its highest value currency notes of Rs 2,000 ($24,15) from public circulation, the country’s central Reserve Bank of India announced on May 19 but added that the denomination will continue to be a legal tender.

As per the evidence, the Rs 2,000 denomination was not being commonly used for transactions, the central bank said in a statement as The Independent writes.

People in the country were advised to deposit and exchange them for smaller denominations by 30 September. RBI’s order, however, has created confusion among the people. On one hand, the bank stated that Rs 2,000 note will continue to be legal tender but failed to mention a deadline.

The exchange of Rs 2,000 notes will start on 23 May giving banks and the public sufficient time to exchange their saved currency into notes of other denominations.

The RBI has cited a “clean note policy” under which it plans to replace the old currency with good-quality currency notes and coins with better security features for the public. RBI also advised banks across India to stop issuing Rs 2,000 notes with immediate effect.

Additionally, the central bank has claimed it maintains an adequate stock of banknotes in other denominations to meet currency requirements.