Share of ₹ 500 note jumps to 86.5% after ₹ 2,000 note withdrawn: RBI

Mangalore Today News Network/NDTV

Mumbai, May 30, 2024: The share of ₹ 500 denomination currency notes in overall currency has jumped to 86.5 per cent at the end of March 2024, as against 77.1 per cent in the year-ago period, the Reserve Bank of India (RBI) said on Thursday.

 

The central bank’s annual report attributed the surge primarily to the withdrawal of the ₹ 2,000 denomination notes announced in May 2023. The share of this denomination has reduced to 0.2 per cent from 10.8 per cent in the year-ago period.

Volume-wise, the ₹ 500 denomination was the highest at 5.16 lakh notes while the ₹ 10 denomination came a distant second at 2.49 lakh as of March 31, 2024, as per data shared in an annual report.

The value and volume of banknotes in circulation increased by 3.9 per cent and 7.8 per cent, respectively, in FY24 as compared with an increase of 7.8 per cent and 4.4 per cent, during the previous fiscal year, it said.

The growth in the number of banknotes in circulation in value terms is among the lowest in recent years.

On the ₹ 2,000 note withdrawal, it said about 89 per cent of notes under the denomination introduced following demonetization in 2016 had been around for over four years were due for replacement, and were not commonly used for transactions, it said.

The withdrawal also seems to have had an impact on the counterfeit notes detection, the annual report said, adding that the number of fake ₹ 2,000 pieces detected jumped to over 26,000 from 9,806 in the year-ago period.

The same for ₹ 500 notes declined to 85,711 pieces in FY24 from 91,110 a year earlier.

On the recently launched central bank digital currency (CBDC) or e-rupee pilot, the annual report pegged the overall outstanding value at ₹ 234.12 crore as against ₹ 16.39 crore in March 2023.

Over ₹ 164 crore, or 70 per cent of the e-rupee, is in the ₹ 500 denomination, while the ₹ 200 denomination comes second at ₹ 32 crore, or 13.7 per cent.

As of March 31, 97.7 per cent of the ₹ 3.56 lakh crore in outstanding ₹ 2,000 denomination notes were returned by the public, the annual report said.

In FY24, the RBI spent ₹ 5,101 crore on security printing as against ₹ 4,682 crore in the year-ago period.

The RBI annual report said it also surveyed currency usage among the public, where over 22,000 respondents across the country indicated that cash is "prevalent" even though digital modes of payments were gaining traction.

The central bank also undertook campaigns to dispel misinformation about coins, the annual report said, adding that it is actively taking forward the process of introducing new/upgraded security features for banknotes.