Around 88% of Rs 2,000 notes back in banking system: RBI

Rs 2000 bank notes

The Reserve Bank of India (RBI) on August 1 said Rs 3.14 lakh crore worth of Rs 2,000 banknotes, or 88 percent in circulation, have returned to the banking system as on July 31.

Consequently, Rs 2,000 banknotes in circulation as at the close of business on July 31 remained at Rs 0.42 lakh crore, the release said.

Of the total notes received back from circulation, 87 percent is in the form of deposits while the remaining 13 percent has been exchanged into other denominations, release added.

The central bank urged the public to utilise the remaining time period to exchange or deposit Rs 2,000 notes.

On May 19, the central bank announced the withdrawal of Rs 2,000 currency bills from circulation.

"In view of the above, and in pursuance of the 'Clean Note Policy' of the Reserve Bank of India, it has been decided to withdraw the Rs 2,000 denomination banknotes from circulation," the RBI said on May 19.

While, on May 24, the RBI Governor said the central bank decided to withdraw the Rs 2,000 currency notes as this denomination was not much in use and high-denomination notes could lead to collateral issues.

“In our surveys, we found out that Rs 2,000 notes were not being used at all... It was being used, but not commonly used,” he said.