The curious case of dwindling Rs 2,000 notes

Hyderabad: There are hardly any Rs 2,000 notes coming out of ATMs. In fact, this denomination is barely seen changing hands. Reason? The Reserve Bank of India (RBI) has stopped printing new Rs 2,000 notes. Also, the supply is declining year on year. The apex bank has not supplied any new Rs 2,000 notes for […]

Hyderabad: There are hardly any Rs 2,000 notes coming out of ATMs. In fact, this denomination is barely seen changing hands. Reason? The Reserve Bank of India (RBI) has stopped printing new Rs 2,000 notes.

Also, the supply is declining year on year. The apex bank has not supplied any new Rs 2,000 notes for the past three years. In the annual report released on Friday, it left the column for indent and supply of Rs 2,000 notes blank for three years in a row — 2021-22, 2020-21 and 2019-20. The report said the volume of Rs 2,000 notes in the total banknotes in circulation was 2.4 per cent in March 2020, 2 per cent in 2021 and 1.6 per cent in 2022. This translated to 27,398 lakh pieces in 2020, 24,510 lakh in 2021 and 21,420 lakh in 2022.

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Value

In value terms, the Rs 2,000 denomination accounted for Rs 5,47,952 crore or about 22.6 per cent of the total banknotes in circulation valued at Rs 24,20,975 crore in 2020. It was Rs 4,90,195 crore (17.3 per cent) of the total Rs 28,26,863 crore in 2021. The figure further reduced to Rs 4,28,394 crore (13.8 per cent) of the Rs 31,05,721 crore worth notes in circulation as of March 2022.

While the RBI report said that Rs 2,000 notes valued at Rs 4.28 lakh crore are in circulation, they are hardly visible in day-to-day transactions. This gives credence to the theory that they are most suited for hoarding, given their high value. During the demonetisation period, various estimates suggested that about Rs 4 lakh crore would not come back into the banking system.

All notes

The value and volume of all banknotes in circulation increased by 9.9 per cent and 5 per cent, respectively, during 2021-22 as compared to 16.8 per cent and 7.2 per cent respectively in 2020-21. In volume terms, the Rs 500 denomination constituted the highest share at 34.9 per cent, followed by Rs 10 banknotes, which constituted 21.3 per cent of the total banknotes in circulation as of March 31, 2022.

The indent of banknotes for 2021-22 was marginally lower by 1.8 per cent than that of a year ago. The supply of banknotes was also marginally lower by 0.4 per cent during 2021-22 than the previous year. However, the indent for and supply of coins during 2021-22 was lower by around 73.3 per cent and 73 per cent respectively, as compared to last year due to accumulated stock and lower demand in the last few years. The disposal of soiled banknotes increased by 88.4 per cent to 1,878.01 crore pieces during 2021-22 from 997.02 crore pieces the previous year.

Counterfeit

Also, about 13,600 counterfeit Rs 2,000 notes were detected this year compared to 8,798 pieces in 2020-21 and 17,020 in 2019-20. The counterfeit notes of Rs 500 denomination nearly doubled to 79,669 pieces in 2021-22 from 39,453 pieces in 2020-21 and 30,054 pieces in 2019-20.

App

The RBI has plans to introduce 11 regional languages in the Mobile Aided Note Identifier (MANI) app for visually impaired persons. It is already available in Hindi and English.

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