Rs 500 note now 86.5% of currency in circulation by value: RBI report

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The value and volume of banknotes in circulation increased by 3.9 per cent and 7.8 per cent, respectively, during 2023-24 compared with an increase of 7.8 per cent and 4.4 per cent, respectively, during the previous year, according to the Reserve Bank of India’s (RBI) annual report for 2023-24.

The share of the Rs 500 note in value terms of the total currency in circulation surged to 86.5 per cent as of March 31, 2024, gaining from 60.8 per cent in March 2020, and from 77.1 per cent in March 2023.

The increase in the share of the Rs 500 note coincides with the declining share of the Rs 2000 note, which was only 0.2 per cent at the end of FY23.

“During 2023-24, the share of Rs 500 banknotes increased in value terms whereas that of Rs 2000 banknotes declined sharply, reflecting the withdrawal of the latter denomination from circulation,” RBI said in the annual report.

The Reserve Bank of India is in the process of withdrawing the Rs 2000 denomination banknotes since last year. The Rs 2000 note, however, is still legal tender.

“About 89 per cent of the Rs 2000 denomination banknotes were at the end of their estimated lifespan of 4-5 years and were not commonly used for transactions,” RBI said while elaborating on the reason for withdrawal. 97.7 per cent of the Rs 2000 notes have returned to the banking system.

The value of total currency in circulation as of March 31, 2024, was Rs 34.8 trillion, up by around Rs 10 trillion in the last five years, from Rs 24.21 trillion in March 2020.