The Reserve Bank of India (RBI) said on Tuesday (August 2) that according to the data received from the banks, the total value of Rs 2000 banknotes received back from circulation stood at Rs 3.14 lakh crore as of July 31, 2023. Consequently, Rs 2000 banknotes in circulation as of the close of business on July 31 stood at Rs 0.42 lakh crore. Thus, 88% of the highest denomination banknotes in circulation as of May 19, 2023, have since been returned.
In May this year, the RBI announced the withdrawal of Rs 2000 banknotes from circulation. The total value of Rs 2000 banknotes in circulation, which amounted to Rs 3.62 lakh crore on March 31, 2023, declined to Rs 3.56 lakh crore as of the close of business on May 19, 2023.
Data collected from major banks indicates that out of the total banknotes in Rs 2000 denomination received back from circulation, about 87% is in the form of deposits and the remaining around 13% has been exchanged into other denomination banknotes.
The central bank has requested the public to utilise the next two months to deposit and/or exchange the Rs 2000 banknotes held with them to avoid any rush in the last few days before September 30, 2023.
One must note that after demonetisation in 2016, the government made it an offence to hold Rs 500 and Rs 1000 notes (beyond a specified limit) after the expiry of the deposit deadlines.
The high-value Rs 2,000 notes were introduced in 2016 after demonetisation, with an aim to replenish cash in circulation. Before finally announcing the withdrawal of Rs 2,000 notes earlier this year, the RBI had expressed its desire to reduce high-value notes in circulation. The printing of Rs 2,000 notes was stopped almost four years ago.