The Reserve Bank of India (RBI) has taken the decision to withdraw ₹2000 denomination banknotes from circulation, which were initially introduced on November 10, 2016, following the demonetization of ₹500 and ₹1000 banknotes. This move was recently confirmed by Union Minister of State for Finance, Shri Pankaj Chuadhary, in response to a query in Rajya Sabha. The decision comes as 89% of the ₹2000 notes issued before March 2017 near the end of their useful life, and a nationwide survey indicates a decline in their preference for transactions. With a focus on adhering to RBI’s “Clean Note Policy” and ensuring an adequate currency supply, the withdrawal of ₹2000 denomination banknotes aims to efficiently manage the circulation of banknotes.
Introduction of ₹2000 Denomination Banknotes:
The introduction of ₹2000 denomination banknotes took place on November 10, 2016, under Section 24(1) of the Reserve Bank of India (RBI) Act, 1934. This decision was made to promptly address the currency requirements of the economy following the withdrawal of all ₹500 and ₹1000 banknotes in circulation during that period.
RBI’s Decision to Withdraw ₹2000 Denomination Banknotes:
As per the recent RBI Press Release dated 19.05.2023, it has been communicated that approximately 89% of the ₹2000 denomination notes issued before March 2017 have almost reached their useful life span of 4-5 years. Furthermore, the results of a pan-India survey indicate a decline in the preference for ₹2000 denomination banknotes in day-to-day transactions. As a result, in alignment with RBI’s “Clean Note Policy,” the decision was taken to withdraw the ₹2000 denomination banknotes from circulation.
| Banknotes of ₹2000 denomination in Circulation since 2016 | ||
| Year | Volume (crore pieces) | Value (₹ crore) |
| 2016 | – | – |
| 2017 | 329 | 6,57,063 |
| 2018 | 336 | 6,72,642 |
| 2019 | 329 | 6,58,199 |
| 2020 | 274 | 5,47,952 |
| 2021 | 245 | 4,90,195 |
| 2022 | 214 | 4,28,394 |
| 2023 | 181 | 3,62,220 |
Data on ₹2000 Denomination Banknotes in Circulation:
The RBI has provided comprehensive data on the volume and value of ₹2000 denomination banknotes in circulation from the years 2016 to 2023, as of the end of March for each respective year. The data illustrates a gradual decrease in both volume and value over time.
Banknotes in Circulation and Post Withdrawal Status:
As of May 19, 2023, the number of ₹2000 denomination banknotes in circulation was 177.93 crore pieces, with a cumulative value of ₹3.56 lakh crore. However, by June 30, 2023, the circulation numbers reduced significantly to 41.80 crore pieces, valued at ₹0.84 lakh crore. During this period, a substantial number of 136.13 crore pieces of ₹2000 notes were returned from circulation.
| ₹2000 Denomination | Volume (crore pieces) | Value (in lakh crore) |
| Circulation as on May 19, 2023 | 177.93 | 3.56 |
| Circulation as on June 30, 2023 | 41.80 | 0.84 |
| Banknotes returned from Circulationsince May 19, 2023 till June 30, 2023 | 136.13 | 2.72 |
Deposits and Loans Outstanding in Scheduled Commercial Banks:
The article also highlights the data on “Total Deposits outstanding” and “Gross Loans and Advances outstanding” reported by Scheduled Commercial Banks, showcasing growth trends over different timeframes.
As on | Total Deposits outstanding | Gross Loans and Advancesoutstanding | ||
| (Values)(in Rs crore) | (Growth_YoY)(in %) | (Values)(in Rs crore) | (Growth_YoY)(in %) | |
| 31 March, 2022 | 1,71,72,755 | 10.17 | 1,27,50,006 | 11.85 |
| 30 June, 2022 | 1,71,77,836 | 10.05 | 1,30,94,857 | 15.53 |
| 30 September, 2022 | 1,77,42,610 | 10.84 | 1,36,92,970 | 18.63 |
| 31 December, 2022 | 1,81,43,432 | 11.27 | 1,41,30,450 | 16.77 |
| 31 March, 2023 | 1,90,56,113 | 10.97 | 1,47,57,129 | 15.74 |
Conclusion:
The withdrawal of ₹2000 denomination banknotes from circulation is a strategic move by the RBI to efficiently manage the currency supply in the country. With the declining preference for these notes in transactions, this step aligns with RBI’s goal to ensure a smooth functioning of the economy and maintain an adequate supply of currency in various denominations.
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