‘RBI paid over ₹1,300 crore to procure over 370 crore pieces of ₹2,000 notes’

With the deadline for deposit/exchange of ₹2000 paper notes approaching this Saturday, over 370 crore pieces of currency notes with a total supply price of over ₹1300 crore will become part of history. In May this year, the Reserve Bank of India (RBI)withdrew these notes from circulation.

Post demonetisation in 2016, ₹2000 notes came into existence with the first and the biggest lot of supply of over 350 crore pieces. However, indent and supply both came down in successive years. The last lot of printing was done in 2018-19 after which it was stopped. That is why the annual reports of the Reserve Bank of India for years starting 2019-20 till 2022-23 showed ZERO under indent for these notes placed with supplied by securities printing presses. The total number of pieces supplied during three years (2016-17, 2017-18 and 2018-19) was over 370 crore pieces with a total value of over ₹7.40 lakh crore.

^{Source: Information obtained through RTI, RBI Annual Report}

Information obtained through the Right to Information Act (RTI) by businessline from Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) showed that the selling price (at which note is being supplied to RBI) for thousand pieces of ₹2000 denomination notes was ₹3540 in 2016-17, which rose to ₹4180 in 2017-18 but came down to ₹3530 in 2018-19.

According to the RBI, ₹2000 denomination banknote was introduced primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of legal tender status of all ₹500 and ₹1000 banknotes in circulation at that time. The objective of introducing ₹2000 banknotes was met once banknotes in other denominations became available in adequate quantities.

It also mentioned that about 89 per cent of the ₹2000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life-span of 4-5 years. The total value of these banknotes in circulation has declined from ₹6.73 lakh crore at its peak of March 31, 2018 (37.3 per cent of Notes in Circulation) to ₹3.62 lakh crore constituting only 10.8 per cent of Notes in Circulation on March 31, 2023. It has also been observed that this denomination is not commonly used for transactions. Further, the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public. ”In view of the above, and in pursuance of the “Clean Note Policy” of the Reserve Bank of India, it has been decided to withdraw the ₹2000 denomination banknotes from circulation,” RBI said while adding that the banknotes in ₹2000 denomination will continue to be legal tender.

Opinion | Withdrawal of ₹2,000 note, a prudent step

People were given a choice to exchange or deposit ₹2000 notes till September 30. The central bank also advised banks to stop issuing ₹2000 denomination banknotes with immediate effect.

As on August 31, according to the data received by RBI from the banks, the total value of ₹2000 banknotes received back from circulation is ₹3.32 lakh crore. ₹2000 banknotes in circulation as at the close of business on August 31, 2023, stood at ₹0.24 lakh crore. Thus, 93 per cent of the ₹2000 banknotes in circulation as on May 19, 2023, have since been returned, RBI said. Further, data collected from major banks indicates that out of the total banknotes in ₹2000 denomination received back from circulation, about 87 per cent is in the form of deposits and the remaining around 13 per cent has been exchanged into other denomination banknotes.

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