The circulation of Rs 2,000 notes has seen a sharp fall in the past year, according to RBI data. The central bank is believed to be squeezing the supply of the Rs 2,000 note to prevent black money hoarders from hoarding the higher-value currency. Large value currency notes are easier to hoard, and can be used for the proliferation of black money. Having a large number of Rs 2,000 note in circulation would have killed the entire purpose of the note ban, which was to stop black money circulation, say experts.
In its report released on Wednesday, the RBI said the proportion of Rs 2,000 notes in circulation has fallen to 37 per cent of the total currency from 50 per cent a year before. The indent for Rs 2,000 notes also fell 15.1 crore pieces in 2017-18 from 350.4 crore a year earlier.
The government had introduced Rs 500 and Rs 2000 notes after demonetisation, which soaked up 85 per cent of the old currency notes from the economy. The circulation of Rs 500 note, however, increased to 43 per cent from 23 per cent a year before. In volume term, the currency increased to 15.1 per cent from 5.9 per cent a year before.
On account of demonetisation, 2016-17 was an exceptional year and the after-effects continued in 2017-18 as well, said the RBI report, adding that the overall indent for 2017-18 was higher by 9.1 per cent as compared to last year. The value of total banknotes in circulation increased by 37.7 per cent over the year to Rs 18-lakh crore in March 2018. The volume of banknotes, however, increased by 2.1 per cent. Meanwhile, the central bank may soon come up with varnished notes to increase their lifespan, which would not only reduce replacement requirement but would also save the central bank from security printing expenditure.
(Edited by Manoj Sharma)