RBI To Withdraw Rs 500 Currency Notes: Days after Andhra Pradesh CM N. Chandrababu Naidu urged the Centre to withdraw Rs 500 currency notes in a bid to clamp down on corruption, a Chartered Accountant (CA) has now claimed via X (formerly Twitter) that the RBI has instructed all banks to stop dispensing Rs 500 banknotes from ATMs by September 30.
The goal is to reduce the circulation of Rs 500 banknotes from all bank ATMs by 75% initially, and then by 90% by March 31, 2026. Going forward, ATMs will only dispense Rs 200 and Rs 100 notes. It is important to note that the Rs 500 banknote is currently the highest denomination currency in circulation following the government’s withdrawal of Rs 2,000 notes from the market. However, the 2000 banknotes continue to be legal tender.
Meanwhile, the Reserve Bank of India (RBI) has said that the total value of Rs 2000 banknotes in circulation, which was Rs 3.56 lakh crore at the close of business on May 19, 2023, when the withdrawal of Rs 2000 banknotes was announced, has declined to Rs 6,181 crore at the close of business on May 31, 2025.
Thus, 98.26% of the Rs 2000 banknotes in circulation as on May 19, 2023, has since been returned. RBI had announced the withdrawal of Rs 2000 denomination banknotes from circulation on May 19, 2023.
Fact Check:
As part of efforts to improve public access to commonly used banknote denominations, RBI had decided that all banks and White Label ATM Operators (WLAOs) must ensure their ATMs regularly dispense Rs 100 and Rs 200 denomination banknotes. By September 30, 2025, 75% of all ATMs are required to dispense either Rs 100 or Rs 200 banknotes from at least one cassette in the market. Notably, the target will increase to 90% by March 31, 2026, ensuring greater availability of these denominations to the public.
Implication
If the number of Rs 100 and Rs 200 notes in circulation increases and these denominations are disbursed more frequently from ATMs, then the number of Rs 500 banknotes in circulation may certainly decrease. However, there is no official confirmation from the RBI regarding the withdrawal of Rs 500 notes, so they remain legal tender in the market.
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