50% of ₹2000 notes have come back: RBI governor

Reserve Bank of India governor Shaktikanta Das on Thursday said that ₹2000 currency notes worth ₹1.8 lakh crore have come back to the banking system.

This is about 50% of the total value of ₹2000 denomination notes in circulation. The value of ₹2000 banknotes in circulation stood at ₹3.62 lakh crore as on March 31, 2023.

Responding to a question on how much of it was through exchange, Das said that figure needs a lot of reconciliation.

"On a provisional basis, about 85% of ₹2000 notes are coming back as deposits into bank accounts," Das said, adding that this is in line with RBI's expectations.

The good thing is that there has not been any rush in any of the banks, the RBI governor said. "I would appeal to customers to not rush to banks in panic. Go whenever you are free."

Das, however, urged customers to avoid the last-minute rush in the last 10-15 days of September. The exercise to exchange or deposit ₹2000 currency notes began on May 23 and will go on till September 30, 2023.

On May 19, the banking regulator withdrew ₹2000 denomination notes from circulation, saying they are "at the end of their estimated life-span of 4-5 years" and "not commonly used for transactions".

Even as ₹2000 denomination notes continue to be legal tender, the central bank urged members of the public to deposit such notes into their bank accounts or exchange them into banknotes of other denominations at any bank branch.

According to RBI, ₹2000 notes can be exchanged into other denominations up to a limit of ₹20,000 at a time at any bank. Banks have been told to maintain daily data on deposits and exchanges of ₹2000 banknotes and submit the details as and when called for.

Fortune India last month reported that various private banks are asking customers for photo identity proof such as Aadhaar if they want to exchange ₹2000 notes but don't hold an account with the bank.

There were only 18,111 lakh pieces of ₹2000 notes, constituting around 1.3% of the total volumes of currency in circulation as of March-end. The value of ₹2000 banknotes in circulation stood at ₹3.62 lakh crore – about 10.8% of the total currency in circulation.

According to RBI's annual report, the value of banknotes in circulation rose 7.8% year-on-year to ₹33.48 lakh crore in 2022-23 as compared with 9.9% during the previous fiscal. The share of ₹500 and ₹2000 notes together accounted for 87.9% of the total value of banknotes in circulation as on March 31, 2023, as compared to 87.1% as on March 31, 2022.

In volume terms, currency in circulation increased 4.4% to 13,621 crore pieces during the year ended March 2023. ₹500 denomination constituted the highest share at 37.9%, followed by ₹10 denomination banknotes which constituted 19.2% of the total banknotes in circulation as on March 31, 2023.