Bank of Baroda receives Rs 10,000 crore in deposits of Rs 2,000 notes

12 Jun 2023 , 11:06 AM

State-owned Bank of Baroda (BoB) has so far received Rs 10,000 crore worth of Rs 2,000 currency notes, either as deposits or in exchange, two senior bank officials told Moneycontrol. The RBI had announced the elimination of Rs 2,000 bills as part of its clean note policy on May 19.

‘We received around Rs 10,000 in Rs 2,000 notes; 90% of that amount came in the form of deposits, and the other 10% came in the form of exchange. On the condition of anonymity, the official stated that things were going smoothly.

As part of its clean note policy, the RBI had already announced the withdrawal of Rs 2,000 bills on May 19. The RBI has given all banks until September 30, 2023, to successfully complete any exchange or deposit. Additionally, it advised banks to immediately halt releasing banknotes with a Rs. 2,000 value.

In order to satisfy the demand for cash after the demonetisation of the Rs 500 and Rs 1,000 notes, the Rs 2,000 note was released in November 2016.

The printing of the Rs 2,000 notes was discontinued in 2018–19 because the goal had been achieved and lesser denomination notes were readily accessible.

Shaktikanta Das, governor of the Reserve Bank of India (RBI), stated on June 8 that roughly 50% of the Rs 2,000 notes in circulation as of the end of March have been reintroduced into the banking system.

The governor estimated that this is worth about Rs 1.8 lakh crore. According to Das, there were approximately 3.62 lakh crore worth of Rs 2,000 notes in circulation as of March’s end.

The head of the RBI continued, ‘About 85% of the notes have returned to the system in the form of deposits.’

Prior to this, State Bank of India (SBI) Chairman Dinesh Kumar Khara stated that deposits of currency notes with a face value of Rs 2,000 totaled around Rs 14,000 crore, while exchanges through the branch network involved notes with a value of Rs 3,000 crore. According to him, we account for around 20% of the market in general.

According to data from the RBI, there were 3.62 lakh crore worth of banknotes with a face value of Rs 2,000 in circulation as of March 31, 2023, making up 10.8% of all notes in circulation.

The anticipated lifespan of Rs 2,000 banknotes is four to five years, and approximately 89 percent of them were printed before March 2017.

‘It has also been noted that transactions with this denomination (Rs 2,000 banknotes) are uncommon. Additionally, the supply of banknotes in other denominations continues to be sufficient to satisfy the public’s need for currency, according to the RBI’s press statement.

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