Only 1.69 per cent of the Rs 2,000 banknotes were yet to be returned to the Reserve Bank of India (RBI) from circulation (as on July 31), the Parliament was informed on Monday. As per the Reserve Bank of India (RBI), the total value of Rs 2,000 banknotes in circulation, which was Rs 3.56 lakh crore at the close of business on May 19, 2023, has declined to Rs 6,017 crore as on July 31.

Before undertaking the exercise of withdrawal of Rs 2,000 banknotes, it was ensured that sufficient buffer stock of cash was available with banks across the country to meet the exchange/withdrawal requirements. The same was augmented through regular supply of cash to various banks located across the country, Minister of State for Finance, Pankaj Chaudhary, said in a written reply to a question in Lok Sabha.

The Rs 2,000 denomination banknote was introduced in November 2016, primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of legal tender status of all Rs 500 and Rs 1,000 banknotes in circulation at that time, he added.

The objective of introducing Rs 2,000 banknotes was met once banknotes in other denominations became available in adequate quantities. About 89 per cent of Rs 2,000 denomination notes were issued prior to March 2017 and are close to the end of their useful life, which spans from 4-5 years

Further, the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public, said the minister. “In view of the above, and in pursuance of the ‘Clean Note Policy’ of the Reserve Bank of India, it was decided to withdraw the Rs 2,000 denomination banknotes from circulation on May 19, 2023,” he added.