Over 97% of Rs 2000 Notes Returned – What Does This Mean for the Economy? -How Finance Works

“Shocking Revelation: Over 97% of Rs 2000 Notes Returned – What Does This Mean for the Economy?”

The Reserve Bank of India (RBI) has announced that an overwhelming 97% of Rs 2000 Notes Returned to the banking system as of Monday. This leaves only about Rs 9,330 crore worth of the notes in public circulation.

The Reserve Bank of India, in an official statement, revealed that the total value of Rs 2,000 banknotes in circulation has decreased from Rs 3.56 lakh crore as of May 19, 2023, when the withdrawal was announced, to Rs 9,330 crore as of the close of business on December 29, 2023. Despite this considerable decline, the Rs 2,000 banknotes retain their status as legal tender.

Individuals can deposit or exchange these notes at any of the 19 RBI offices across India or use India Post to send the notes for credit to their bank accounts. The deadline for exchange or deposit was initially set for September 30, but it was later extended to October 7.

Following the discontinuation of deposit and exchange services at bank branches on October 7, individuals have been provided with the choice to either exchange the currency or have the equivalent sum credited to their bank accounts at the 19 RBI offices.

Notably, the Rs 2,000 banknotes were introduced in November 2016 following the demonetization of the then-prevailing Rs 1,000 and Rs 500 banknotes. Reports of long queues during working hours at the RBI offices for exchange/deposit of Rs 2,000 notes have been observed, reflecting the public’s engagement with this financial matter.

This move aimed to curb issues related to black money and counterfeit currency. Despite the initial intention, the circulation of Rs 2,000 notes has presented its own set of challenges, including potential hoarding and difficulty in making changes for smaller transactions. Furthermore, the presence of high-denomination currency can complicate efforts to track and prevent illicit financial activities. As a result, this issue remains a topic of interest and debate within financial and policy-making circles.

The 19 offices where these notes can be deposited/exchanged are in Ahmedabad, Bengaluru, Belapur, Bhopal, Bhubaneswar, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Jammu, Kanpur, Kolkata, Lucknow, Mumbai, Nagpur, New Delhi, Patna, and Thiruvananthapuram.