About 93% Rs 2,000 currency notes returned to banking system, says RBI

93% of Rs 2,000 notes return to About 93 per cent of Rs 2,000 currency notes that were in circulation on May 19 — the day when the decision was taken to withdraw them from circulation — have been returned to banks by the end of August 2023.

The Reserve Bank today said in absolute terms, the total value of Rs 2,000 banknotes received back from circulation is Rs 3.32 trillion up to August 31, 2023.
 

Consequently, Rs 2,000 banknotes in circulation as at the close of business on August 31, 2023, stood at Rs 0.24 trillion. The total value of Rs 2,000 in circulation, which amounted to Rs 3.62 trillion on March 31, 2023, had declined to Rs 3.56 trillion as at the close of business on May 19, 2023, the Reserve Bank said in a statement.

The Reserve Bank said data collected from major banks indicates that out of the total Rs 2,000 banknotes received back from circulation, about 87 per cent was in the form of deposits. The remaining around 13 per cent has been exchanged into other denomination banknotes.

This return of money on account of the withdrawal of Rs 2,000 notes contributed to the swelling of liquidity in the system. The Reserve Bank imposed a 10 per cent incremental Cash Reserve Ratio on the increase in their net demand and time liabilities (NDTL) between May 19, 2023, and July 28, 2023, on a temporary basis to suck out excess liquidity. This being a temporary measure, the Reserve Bank said it will review the step on or before September 8, 2023, with a view to returning the impounded funds to the banking system ahead of the festival season.