Over two-thirds of ₹2,000 notes returned in 1 month of withdrawal: RBI

Reserve Bank of India (RBI) Governor Shaktikanta Das said on Sunday that since the decision to withdraw 2,000 notes was announced, more than two-thirds of the total 2,000 currency notes in circulation have returned to the system.

As part of the clean note policy, the central bank on May 19 announced that 2,000 currency notes worth around 3.62 lakh crore will be withdrawn from the circulation.

Announcing the second monetary policy review of the financial year on June 8, Shaktikanta Das said so far, 1.8 lakh crore worth of 2,000 currency notes have been returned to the system, which is approximately 50 per cent of notes in circulation.

In an interview with PTI, Governor Shaktikanta Das said, “More than two-thirds or 2.41 lakh crore worth of the 3.62 lakh crore (as of March 31, 2023) of the now-recalled 2000 banknotes have come back to the system as of mid-last week.”

Approximately 85 per cent of the overall funds returned to the system are in the form of deposits, with the remaining portion allocated to currency exchanges, the RBI governor said.

Shaktikanta Das also said that people don’t need to rush to banks to exchange their 2,000 currency notes even though the Reserve Bank has set September 30 as the last day to exchange the 2,000 notes.

Speaking of the impact on the economy since the announcement, Shaktikanta Das said, “I don’t see any negative impact of the note recall on the economy at all.”

The central bank and the government project the GDP to clip at 6.5 per cent this fiscal, with Q1 printing in at 8.1 per cent and then tapering off in the subsequent quarters.  

While 2,000 currency notes will continue to remain legal tender, as per the RBI announcement, Shaktikanta Das has said that he was not sure whether to request the government to revoke the legal tender status of these notes after the September 30 deadline.

Within days of announcing demonetisation in November 2016, 2,000 currency notes were introduced into the system. About 89 per cent of the 2,000 banknotes were issued prior to March 2017 and are at the end of their estimated life span of four-five years.

The total value of these banknotes in circulation has declined from 6.73 lakh crore at its peak as of March 31, 2018 (37.3 per cent of notes in circulation) to 3.62 lakh crore, constituting only 10.8 per cent of the notes in circulation as of March 31, 2023.

The central bank’s mints had stopped printing the 2,000 notes way back in 2018-19 itself.

(With agency inputs)

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Updated: 25 Jun 2023, 04:59 PM IST

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