In a move that could see lower availability of Rs 2,000 notes in the market, many banks are increasingly filling their ATMs (automated teller machines) with lower denomination currency notes of Rs 500 or below. Some banks have started recalibrating their ATMs to account for a greater chunk of lower denomination notes. While the Finance Ministry has maintained there is no plan to phase out Rs 2,000 notes, banking industry executives see the proportion of this falling over years.
State-owned Indian Bank has already announced it has decided to stop using Rs 2,000 notes in their ATMs and more lenders are going slow on dispensing this currency through their ATMs. The high-value currency note was introduced along with a new Rs 500 note after the Centre, on November 8, 2016, declared old Rs 500 notes and Rs 1,000 notes as invalid, thereby pulling out of the economy nearly 86 per cent of the currency in circulation by value.
On February 11, the Ministry clarified in Parliament that there is “no proposal under consideration” to withdraw Rs 2,000 currency notes from circulation. However, RBI data shows that circulation of this currency has fallen sharply in proportion to the Rs 500 note. As per latest data available with the Reserve Bank of India (RBI), the share of Rs 2,000 notes in the total bank notes in circulation fell to 3.0 per cent in FY19 against 3.3 per cent in FY18 and 3.3 per cent in FY17. On the other hand, the share of Rs 500 notes in the total bank notes in circulation rose more than threefold to 19.8 per cent in 2018-19, against 15.1 per cent in 2017-18 and 5.9 per cent in 2016-17. In terms of value, the share of Rs 2,000 notes fell to 31.2 per cent in 2018-19 from 50.2 per cent in 2016-17; meanwhile, the same for Rs 500 notes rose to 51.0 per cent in 2018-19 from 22.5 per cent in 2016-17.
The value of all Rs 2,000 notes issued in 2018-19 stood at Rs 6,58,200 crore, roughly the same as Rs 6,57,100 crore in 2016-17. In contrast, the value of all Rs 500 notes issued in 2018-19 stood at Rs 10,75,900 crore, a more than three-fold surge from Rs 2,94,100 crore in 2016-17.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines