76% of ₹2,000 notes in circulation back in banks as on 19 May

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₹2.72 trillion in ₹2,000 notes, or 76%, of such notes in circulation as on 19 May when the regulator announced the withdrawal, the Reserve Bank of India (RBI) said on Monday. The total value of ₹2,000 banknotes remaining in circulation as at the close of business on 30 June stood at ₹84,000 crore, RBI said.

Data collected from major banks, RBI said, indicated that of the total ₹2,000 banknotes received back from circulation, about 87% have been deposited into bank accounts while the remaining have been exchanged into other denomination banknotes.  “Members of the public are requested to utilize the next three months to deposit and/or exchange the ₹2,000 banknotes held with them to avoid any rush in the last few days before 30 September," it said.  As per RBI data, the total value of ₹2,000 banknotes in circulation declined from ₹6.73 trillion on 31 March 2018, constituting 37.3% of notes in circulation, to ₹3.62 trillion, or 10.8%, of notes in circulation on 31 March. As per RBI data, the total value of ₹2,000 banknotes in circulation declined from ₹6.73 trillion on 31 March 2018, constituting 37.3% of notes in circulation, to ₹3.62 trillion or 10.8% of notes in circulation on 31 March.

It further declined to ₹3.56 trillion as at the close of business on 19 May. On 19 May, RBI announced withdrawal of ₹2,000 bank notes from circulation, allowing people holding these notes until 30 September to deposit or exchange them.

The central bank cited its “Clean Note Policy" as one of the reasons for this withdrawal. This move was expected to lead to an increase in bank deposits and on experts said on Thursday that the withdrawal of these bank notes would lead to a transient rise in liquidity.