Is the Rs 500 note the next to go? Days after Andhra Pradesh Chief Minister N. Chandrababu Naidu urged the Centre to phase out ₹500 notes to combat corruption, a Chartered Accountant on X (formerly Twitter) claimed that the Reserve Bank of India (RBI) has directed all banks to stop dispensing ₹500 notes from ATMs by September 30.
According to the viral claim, the plan is to reduce the presence of ₹500 notes in ATMs by 75% by September 2025, and by 90% by March 2026. ATMs, it was claimed, will eventually only dispense ₹100 and ₹200 notes. This sparked public concern, as ₹500 remains the highest denomination widely in circulation since the withdrawal of ₹2000 notes, which are still legal tender but rarely used.
However, here is the truth.
While the RBI has indeed directed banks and White Label ATM Operators (WLAOs) to ensure that at least 75% of ATMs dispense ₹100 or ₹200 notes by September 30, 2025—and 90% by March 31, 2026—there has been no official announcement regarding the withdrawal of ₹500 notes.
The RBI’s move aims to improve public access to smaller denominations and ensure ease of transactions, not to eliminate the ₹500 note.
Moreover, the RBI recently reported that 98.26% of ₹2000 notes have been returned to the banking system since their withdrawal was announced on May 19, 2023, reducing their total circulation from ₹3.56 lakh crore to ₹6,181 crore as of May 31, 2025.
Bottom Line: ₹500 notes remain legal tender, and there is no official directive from the RBI to phase them out. The current initiative is solely focused on increasing the availability of ₹100 and ₹200 notes through ATMs.
