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The ₹2,000 denomination notes are fast vanishing from circulation from ATM machines and even bank counters.
“We are increasingly seeing a drop in the number of ₹2,000 notes in day-to-day transactions of late compared to a few months ago, which, I think, is the trend in many other banks too,’’ a senior executive of State Bank of India told BusinessLine on the condition of anonymity.
BusinessLine’s enquiries with about half-a-dozen public sector and two private sector banks confirmed that this is not an isolated phenomenon and is seen across the country with some regional variations.
“The drop in the number of ₹2,000 notes in cash transactions and ATMs is very significant in Delhi which is going to polls on Saturday, while all major metros have been seeing a fall in numbers,’’ a senior executive of a leading public sector bank said.
Gujarat, Bihar, Telangana and Uttar Pradesh have also seen a drop in circulation of ₹2,000 notes. The shortage is felt more in regions where real estate is doing well.
Why the dip?
About 80 per cent of the notes being stacked up in ATMs are in the denominations of ₹500, ₹200 and ₹100 these days, according to sources.
Bankers see two reasons for the drop in the number of the highest denominated currency note since its introduction after demonetisation of ₹1,000 and ₹500 notes in November 2016. There is “expectation’’ among banks and the general public that the notes are likely to be withdrawn as the RBI has stalled the printing of new notes.
Indeed, there has been a demand from a section of top officials and experts that the notes should be withdrawn in the wake of “increasing hoarding’’.
Anyway, the middle and salaried classes do not seem to prefer the ₹2,000 notes.
“We are not sure if this note will stay or go. I am not ready for fresh trouble if they are withdrawn,’’ AY Khan, an SBI customer, said while requesting the teller for ₹500 notes.
The dip in circulation of ₹2,000 notes is happening at a time when circulation of bank notes has gone up 17 per cent to ₹21.1 trillion from ₹18.03 trillion in FY18, according to the RBI Annual Report of 2018-19. In volume terms, notes in circulation increased 6.2 per cent to 108.76 billion pieces from 102.4 billion during FY19.
The ₹500 and ₹2,000 bank notes constituted 82 per cent of the total value of bank notes in circulation as on March 2019. There has been a 3 per cent increase in the number of ₹500 notes in circulation in 2018-19.
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