The share of India’s highest denomination currency note has continued to come down as no new ₹2,000 notes have been printed in the last few years. The value of the total ₹2,000 notes in circulation has dropped to 13.8% of the total, compared with 17.3% a year ago, showed RBI’s annual report for FY22.
₹2,000 banknotes now form only 1.6% of the total volume of notes in circulation, compared with 2% in FY21 and 2.4% a year before that. In value terms, the share of ₹500 and ₹2000 banknotes together accounted for 87.1% of the total value of banknotes in circulation as on March 31, 2022, as against 85.7% as on March 31, 2021.
The value and volume of banknotes in circulation increased by 9.9% and 5%, respectively, during 2021-22 as compared with 16.8% and 7.2%, respectively, during 2020-21.
In volume terms, ₹500 denomination constituted the highest share at 34.9%, followed by ₹10 denomination banknotes, which constituted 21.3% of the total banknotes in circulation as on March 31, 2022, RBI’s report added.
“The focus of currency management during the year continued on making available adequate quantity of clean notes in circulation, especially in the backdrop of the second wave of the COVID-19 pandemic. The Reserve Bank made an attempt to gauge trends and preferences in public usage of banknotes with a view to optimise the currency management operations,” the central bank stated in its annual report on currency circulation.
The ₹2,000 notes were introduced in November 2016, soon after the government withdrew ₹500 and ₹1,000 notes in an attempt to curb black money and fake currencies. While a new ₹500 note was printed, ₹1,000 currency notes were discontinued.
Currency in circulation (CiC) includes banknotes and coins. Presently, the Reserve Bank of India (RBI) issues banknotes in denominations of ₹2, 5, 10, 20, 50, 100, 200, 500 and 2000.
The functions relating to the issuance of currency (both banknotes and coins) and their management are performed by the RBI through its issue offices, currency chests and small coin depots spread across the country.