The Reserve Bank of India (RBI) said on Thursday that half of India’s ₹2000 bank notes are now in banks. In contrast to the demonetisation of 500 and 1,000 notes earlier, these banknotes remain legal tender until September 30, even though they were removed by the RBI on May 19.
As of March 31, there were 3.62 lakh crores of 2000 bank notes in circulation.
About 1.8 lakh crore of the banknotes have been returned since the announcement. Shaktikanta Das, RBI governor, said that roughly half of the banknotes in circulation on 31st March have been returned…so 50% of the banknotes have been issued again,” following RBI’s announcement of the monetary policy committee’s decision, which kept the repo rate at 6.5% unchanged.
As Das explained, they are still figuring out how much of the 2000 notes came in as deposits and how much of it was exchanged for other notes. Das said, “That figure needs to be reconciled, but roughly 85% of it is being deposited in bank accounts.”
India’s ₹2000 bank notes get a boost
In his speech, Das mentioned that the note withdrawals could increase deposits. System liquidity, however, is still in surplus mode, and could increase once 2000 bank notes are deposited in banks.
As a result, a Kotak Institutional Equities report estimated that up to 1.5-2 lakh crores of deposits will enter banks directly and indirectly. Most people are also using the notes to purchase gold, consumer goods, and so on – a move that is also expected to make its way into the banks as well.
An April report by Kotak Institutional Equities said that durable liquidity could increase by around 1 lakh crore depending on the behavior of depositors.
A survey conducted by LocalCircles indicated that 64% of respondents do not have notes of that denomination, while 6% indicated that they have at least one lakh rupees in 2,000 rupee notes. Furthermore, 15% said they had up to 20,000 rupees – which they could exchange easily at banks.
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