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India: RBI says 76 per cent of Rs2,000 notes valued at Rs2.72 trillion returned to banks

In value terms, Rs2,000 notes in circulation has come down to Rs840 billion as on June 30 from Rs3.56 trillion on the day of announcement of withdrawal on May 19

As much as 76 per cent of the Rs2,000 currency notes in circulation have either been deposited or exchanged at banks, the Reserve Bank of India (RBI) said on Monday and asked the public to turn in the remaining notes before September 30.

In value terms, Rs2,000 notes in circulation has come down to Rs840 billion as on June 30 from Rs3.56 trillion on the day of announcement of withdrawal on May 19.

In a statement, RBI said 87 per cent of the notes returned have been deposited in bank accounts by public while the remaining 13 per cent were exchanged by them in other denominations.

The central bank, in a surprise move, on May 19 announced withdrawal of Rs 2,000 notes from circulation but gave public time till September 30 to either deposit such notes in accounts or exchange them at banks.

Unlike the November 2016 shock demonetisation when old Rs500 and Rs1,000 notes were invalidated overnight, the Rs2,000 notes will continue to be a legal tender till September 30.

The total value of Rs2,000 banknotes in circulation, which amounted to Rs3.62 trillion as on March 31, 2023, had declined to Rs3.56 trillion as at the close of business on May 19, 2023.

"According to the data received from the banks, the total value of Rs2,000 bank notes received back from circulation after the announcement on May 19 is Rs2.72 trillion up to June 30, 2023.

"Consequently, Rs2,000 bank notes in circulation as at the close of business on June 30 stood at Rs 0.84 trillion. Thus, 76 per cent of the Rs2,000 bank notes in circulation as on May 19, 2023, have since been returned," the central bank said in a statement.

Further, RBI said that data collected from major banks indicates that out of the total bank notes in Rs2,000 denomination received back from circulation, about 87 per cent is in the form of deposits and the remaining around 13 per cent has been exchanged into other denomination bank notes.

"Members of the public are requested to utilise the next three months to deposit and/or exchange the Rs2,000 bank notes held with them to avoid any rush in the last few days before September 30, 2023," it added.

It may be noted that RBI has not yet clarified what would be the status of Rs2,000 notes in private hands after September 30.

After announcing demonetisation in 2016, the government had made it an offence to hold the withdrawn Rs500 and 1,000 notes (beyond a specified limit) after expiry of the deposit deadlines.