The Reserve Bank of India (RBI) recently shared updated figures regarding the circulation of Rs. 2000 banknotes in the country. On May 19th 2023, the RBI had announced that these high denomination notes would be withdrawn from use gradually.
As per the latest data provided by the central bank, the total value of Rs. 2000 notes in active circulation has reduced drastically from Rs. 3.56 lakh crores on the date of announcement, to just Rs. 8470 crores by February 29th 2024. This means that an overwhelming 97.62% of the Rs. 2000 notes that were circulating on May 19th 2023 have since been returned to banks.
The RBI had introduced Rs. 2000 notes in November 2016 with the aim of improving cash availability after the sudden demonetization of Rs. 500 and Rs. 1000 notes. However, their printing was stopped in 2018-19 once sufficient supplies of other denominations like Rs. 500 and Rs. 200 notes had been restored.
While announcing the withdrawal earlier this year, the RBI had said that Rs. 2000 notes would continue remaining legal tender indefinitely. This means citizens can continue using these notes for any transactions, and banks have to accept them without refusal.
As per the latest statement, deposit and exchange facilities for the high value currency were available at all bank branches until October 7th 2023. Even after this date, the 19 regional offices of the RBI have continued accepting Rs. 2000 notes for deposit or exchange on behalf of banks.
The sharp decline in circulation figures suggests that most people chose to deposit their existing Rs. 2000 notes back into bank accounts following the announcement. This could be because these high denomination notes are not as commonly used in daily transactions as smaller denominations. People may have found it more convenient to hold their money as bank balances or exchange the notes for bills they require more regularly.
While the RBI has not officially discontinued the Rs. 2000 note, its reduced usage and printing halt indicates the currency may eventually be phased out of active circulation over the long run. However, as it remains legal tender, holders of these notes need not worry about their validity for the foreseeable future. The central bank will continue to honor all outstanding Rs. 2000 notes presented at its counters or bank branches across the country.
The RBI collects and publishes data on currency holdings and usage patterns on a periodic basis. By sharing the latest figures, it aims to keep the public informed about significant trends in the money market. The sharp drop in Rs. 2000 note circulation reinforces people’s acceptance of the withdrawal announcement through their deposit behavior over the past months. However, the currency remains accepted for transactions as long as members of the public or banks choose to use it.
