Share of Rs 500 notes jumps to 86.5% as Rs 2,000 notes get withdrawn: RBI

Mumbai: The share of Rs 500 denomination currency notes in overall currency has jumped to 86.5 per cent at the end of March 2024, as against 77.1 per cent in the year-ago period, the Reserve Bank of India (RBI) said on Thursday.

The central bank annual report attributed the surge primarily to the withdrawal of the Rs 2,000 denomination notes announced in May 2023. Share of this denomination has reduced to 0.2 per cent from 10.8 per cent in the year-ago period.

Volume-wise, the Rs 500 denomination was the highest at 5.16 lakh notes while Rs 10 denomination came a distant second at 2.49 lakh as of March 31, 2024, as per data shared in an annual report.

The value and volume of bank notes in circulation increased 3.9 per cent and 7.8 per cent, respectively, in FY24 as compared with an increase of 7.8 per cent and 4.4 per cent, respectively, during the previous fiscal year, it said.

The growth in the number of bank notes in circulation in value terms is among the lowest in recent years.

On the Rs 2,000 note withdrawal, it said about 89 per cent of notes under the denomination introduced following demonetization in 2016 had been around for over four years and were due for replacement, and were not commonly used for transactions, it said.

The withdrawal also seems to have had an impact on the counterfeit notes detection, the annual report said, adding that the number of fake Rs 2,000 pieces detected jumped to over 26,000 from 9,806 in the year-ago period.

The same for Rs 500 notes declined to 85,711 pieces in FY24 from 91,110 a year earlier.

On the recently launched central bank digital currency (CBDC) or e-rupee pilot, the annual report pegged the overall outstanding value at Rs 234.12 crore as against Rs 16.39 crore in March 2023.

Over Rs 164 crore, or 70 per cent of the e-rupee, is in the Rs 500 denomination, while Rs 200 denomination comes second at Rs 32 crore, or 13.7 per cent.

As of March 31, 97.7 per cent of the Rs 3.56 lakh crore in outstanding Rs 2,000 denomination notes were returned by the public, the annual report said.

In FY24, the RBI spent Rs 5,101 crore on security printing as against Rs 4,682 crore in the year-ago period.

The RBI annual report said it also carried out a survey on currency usage among the public, where over 22,000 respondents across the country indicated that cash is "prevalent" even though digital modes of payments were gaining traction.

The central bank also undertook campaigns to dispel misinformation about coins, the annual report said, adding that it is actively taking forward the process of introduction of new/upgraded security features for banknotes.