High denomination notes are rarely found in bank ATMs and other transactions, anyone wondering what happened to those notes, the small, purple ₹2,000 notes? Almost all of us wanted to hold that note as old 500 and 1,000 notes were exchanged due to demonetization!
“According to Reserve Bank of India (RBI) data, there is a disconnect between the numbers of ₹ 2,000 notes in circulation and their daily transactions. This could be due to a reduction in cash reserves and the total number of notes in circulation over the past three years,'' said a senior official of a top public sector bank on condition of anonymity.
According to the information shared by the government in the Lok Sabha, no fresh indent was given to the RBI for the printing of ₹2,000 notes in the last two financial years (FY20 and FY21). RBI's data, too, shows a steady fall in the volumes and value of these notes. Volumes declined from 32,910 units in 2019 to 24,510 units at the end of March 2021, while value also decreased accordingly from ₹6,58,199 crore to ₹4,90,195 crore.
In terms of value, the share of ₹500 and ₹2,000 banknotes was 85.7 percent of the total value of banknotes in circulation as on March 31, 2021, compared to 83.4 percent as on March 31, 2020.
A senior SBI official said there was poor "arrival" of ₹2,000 notes at bank counters. “Bank notes are expected to be in circulation and many customers are not bringing ₹2000 notes for the transaction. As new notes are not available in a sufficient number of currency chests, they have now been replaced by around ₹500 notes,” he said. Some bankers also say there is a general shortage of high-denomination notes during election years for "obvious reasons".
Interestingly, consumers are paying for the shortage of ₹2,000 notes. “As ATMs can dispense only 40 notes at a time, we can withdraw only ₹20,000. If the ATM tray also has ₹2,000 notes, it is good for the customer because of the high ATM usage charges these days. So, banks are actually benefiting from this,'' said HDFC Bank customer PK Krishna.
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