RBI update: 97.62% of Rs 2000 notes returned, circulation value dropped sharply
Synopsis
The total value of Rs 2000 banknotes in circulation, standing at Rs 3.56 lakh crore during the withdrawal in May last year, has substantially decreased to Rs 8,470 crore as of February 29, 2024. This reflects a notable decline in the prevalence of the high-denomination notes within the monetary system.
The Reserve Bank of India (RBI) revealed that approximately 97.62 percent of the Rs 2000 banknotes, in circulation as of May 19 last year, have been returned. This disclosure comes as part of the central bank's periodic updates on the status of the withdrawal of the Rs 2000 denomination banknotes, following the announcement of their withdrawal on May 19, 2023.
The total value of Rs 2000 banknotes in circulation, standing at Rs 3.56 lakh crore during the withdrawal in May last year, has substantially decreased to Rs 8,470 crore as of February 29, 2024. This reflects a notable decline in the prevalence of the high-denomination notes within the monetary system.
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RBI had officially withdrawn the Rs 2000 banknotes on May 19, 2023, and the facility for deposit and exchange of these notes was available at all bank branches until October 7, 2023. The announcement highlights that the exchange facility has been ongoing at the 19 Issue Offices of the Reserve Bank since May 19, 2023.
Despite the withdrawal announcement, it's crucial to note that Rs 2000 banknotes continue to be legal tender. Individuals and entities have been able to deposit these notes into their bank accounts, with RBI Issue Offices accepting currency notes from October 9, 2023.
RBI had communicated that approximately 89 percent of the Rs 2000 denomination banknotes were issued before March 2017 and were nearing the end of their estimated life-span of 4 to 5 years.
The total value of these banknotes in circulation witnessed a significant reduction from Rs 6.73 lakh crore on March 31, 2018, comprising 37.3 percent of notes in circulation, to Rs 3.62 lakh crore, constituting only 10.8 percent of notes in circulation on March 31, 2023. This underscores the phased-out approach toward high-denomination currency notes.
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