There were rumors in 2025 suggesting the abolition of 500 notes in the country, which generated confusion in the country. There was a viral message that the Reserve Bank of India (RBI) had ordered banks to cease dispensing ₹500 notes through the ATM before September. But, the government and RBI officially explained that 500 notes are not being phased out and 500 notes are still a legal tender.
Why Was There Confusion?
There was a WhatsApp message falsely stating that after September 30, 2025, no bank would issue any more ₹500 notes through ATMs and that henceforth all notes would only be ₹100 and ₹200 notes. This prompted panic withdrawals and spreading misinformation that went viral over the internet.
Official Clarification by RBI and PIB
Both the Press Information Bureau (PIB) and RBI have ensured that there is no such directive. ₹500 notes will still be provided in all transactions. RBI has not stated that it is going to demonetize or recall ₹500 notes in circulation2.
What the RBI Circular Actually Says
The real guideline of RBI concerns the better accessibility of smaller denominations. It is said that banks and White Label ATM Operators (WLAOs) are required to make sure that at least one of the cassettes of the ATM dispense 100 or 200 denominations. The rationale behind this step is to enable the populace to easily access lower-value notes commonly used.
Key Highlights of RBI’s ATM Rebalancing Plan
| Guideline Focus | Clarification | Impact on Public Use |
|---|---|---|
| ₹500 Note Status | Still legal tender | No need to exchange or panic |
| ATM Dispensing Requirement | 75% ATMs to offer ₹100/₹200 by Sept 2025 | Better access to small denominations |
| Future Target | 90% ATMs to comply by March 2026 | Gradual shift, not a ban |
| Viral Message Status | Declared false by PIB Fact Check | Public advised to ignore rumors |
Final Thoughts
The RBI guideline of 2025 does not prohibit 500-note. Rather, it is meant to increase access to smaller denominations at ATMs. People do not have to worry about 500 notes. Never trust financial news that has not been verified by the official sources since you can fall prey to misinformation.
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