Explained: Why Rs 2,000 Note Was Introduced, And Why It's Being Junked

Rs 2,000 Notes Withdrawn: A majority (89 per cent) of the Rs 2,000 notes were issued before March 2017, and are at the end of their estimated life span of four to five years.

The Rs 2,000 banknote was introduced in November 2016 under Section 24(1) of the RBI Act, 1934 -- which allows the central bank to issue notes of any denomination not exceeding Rs 10,000 -- primarily to meet the currency requirement of the economy "in an expeditious manner" after the big demonetisation exercise, in which the legal tender status of all Rs 500 and Rs 1,000 banknotes in circulation at that time was withdrawn, the Reserve Bank of India has said.

"With fulfilment of that objective and availability of banknotes in other denominations in adequate quantities, printing of Rs 2000 banknotes was stopped in 2018-19," RBI said.

RBI Governor Shaktikanta Das today said the exercise is part of the "currency management system" of the central bank, and said there's no reason to rush to banks as people have four months to change or deposit Rs 2,000 notes.

Mr Das said the bank expects most notes to come back. "We'll decide what to do next after September 30. But it will continue as legal tender," he said and assured the people, even those living in foreign countries, that the RBI will be sensitive to all their problems.