A report, authored by State Bank of India’s chief economist, Soumya Kanti Ghosh, cited data submitted by Finance Ministry to the Lok Sabha which said the value of ₹2,000 notes were ₹7,308 billion as on December 8, while the value of small denomination currency in circulation up to March 2017 was ₹3,501 billion, according to RBI’s annual report.
As per the information given by the Ministry, the RBI has printed 16,957 million pieces of ₹500 notes and 3,654 million pieces of ₹2,000 notes as on December 8. The total value of such notes translates to ₹15,787 billion.
“This implies that the value of high denomination notes was equivalent to ₹13,324 billion as on December 8 after we net out the small denomination notes from the currency in circulation on December 8. This means that the residual amount of high-value currency notes of ₹2,463 billion may have been printed by the RBI but not supplied in the market,” the report said.
“…it is safe to assume that ₹2,463 billion may be on the lower side as the RBI must have printed notes of small denomination in the interregnum (₹50 and ₹200),” it said. Mr. Ghosh said that as the ₹2,000 denomination led to challenges in transactions, it ‘seemed that RBI may have either consciously stopped printing’ these notes ‘or is printing them in smaller numbers after the initial print run to normalise the liquidity situation’.
To conclude, art of the ₹2,000 denomination currency notes printed so far is possibly being held back by the central bank, a recent report from State Bank of India indicated. The high-value note was introduced for the first time last year after the withdrawal of ₹500 and ₹1,000 notes.
This may also mean that, RBI might withdraw new Rs 2000 notes from circulation over a period of time.