RBI Annual Report: Share Of Rs 2,000 Currency Notes Declines In 2018-19

The share of high-value currency notes declined over the last year as the Reserve Bank of India kept production of Rs 2,000 notes in check. Instead, the focus shifted towards production of Rs 500 notes, showed data included in RBI's annual report for 2018-19.

After the announcement of demonetisation on Nov. 8, 2016, the central bank stepped up production of high-value notes to help monetise the economy quickly. However, that led to an even greater skew in availability of currency notes towards those of high value. This was seen as a contradiction since demonetisation was supposed to reduce the number of high-value currency notes in the economy, as they can be used for storing unaccounted wealth more easily.

As of March 31, 2019, the share of Rs 2,000 notes in terms of total value of currency in circulation fell to 31.2 percent from 37.3 percent in 2017-18 and 50 percent in 2016-17. Data on volume of currency notes of different denomination shows that the number of Rs 2,000 notes actually fell between 2018 and 2019.

The emphasis has now shifted to notes of Rs 500 and Rs 200 denominations.

The value of Rs 500 notes in the economy is now 51 percent of the total value of currency in circulation. The share of Rs 200 notes has increased marginally to 3.8 percent. There are Rs 80,000-crore worth of newly introduced Rs 200 notes in circulation as of March 2019, compared to Rs 37,100 crore in the previous year.

In terms of volume, Rs 10 and Rs 100 notes in circulation constitute 47.2 percent of all banknotes in circulation as of March 31, 2019, compared to 51.6 percent at the end of March 2018. However, in terms of value, both banknotes account for 11 percent of all banknotes in ciruclation (Rs 2.3 lakh crore) as of March 2019, compared to 14 percent (Rs 2.6 lakh crore) in March 2018.

Number Of Counterfeit Notes Decline

The total number of counterfeit notes detected has declined to 3,17,384 notes in the year ended March 31, 2019, from 5,22,783 in the previous year.

There was a substantial rise in detection of counterfeit notes of Rs2,000 denomination from 638 in the year ended March 31, 2017, to 17,929 by March 31, 2018. In the year ended March 31, 2019, around 21,847 counterfeit notes of Rs 2,000 were found.

In comparison, there has been a 121 percent a rise in the number of counterfeit Rs 500 notes detected of the new-design to 21,865 banknotes as of March 31, 2019, compared to 9892 notes in FY18.