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, according to the Reserve Bank of India's annual report.

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, the RBI report says.

In volume terms, currency in circulation increased by 4.4% to 13,621 crore pieces during the year ended March. ₹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.

There were only 18,111 lakh pieces of ₹2000 notes, constituting around 1.3% of the total volume 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.

In comparison, the value of ₹500 notes in circulation stood at 25.81 lakh crore, cornering over 77% share of the total currency in circulation.

At ₹1.8 lakh crore in value, ₹100 denomination notes constituted 5.4% of banknotes in circulation.

The functions relating to the issuance of currency — both banknotes and coins — and their management are performed by the Reserve Bank through its 19 issue offices, 2,838 currency chests and 2,293 small coin depots spread across the country.

₹2000 fake notes decline

During 2022-23, out of the total Fake Indian Currency Notes (FICNs) detected in the banking sector, 4.6% were detected at the Reserve Bank and 95.4% at other banks. This does not include counterfeit notes seized by the police and other enforcement agencies.

Compared to the previous year, there was an increase of 8.4% and 14.4% in the counterfeit notes detected in the denominations of ₹20 and ₹500 (new design), respectively, the RBI report says. The counterfeit notes detected in the denominations of ₹10, ₹100 and ₹2000 declined by 11.6%, 14.7% and 27.9%, respectively, it adds.

Digital payments zoom

Transactions routed through digital modes recorded a marked expansion in 2022-23 over and above the strong growth witnessed a year ago. In 2022-23, total digital payments recorded growth of 57.8% and 19.2% in volume and value terms, respectively, on top of growth of 63.8% and 23.1%, respectively, in the previous year, the central bank's annual report says.

"The strong penetration and growth in Unified Payments Interface (UPI) were buoyed by rapid merchant onboarding, growing digital awareness and policy thrust on continuous enhancements in the scope and reach of payment systems," it adds.

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