Banks are recalibrating ATMs to replace high-value Rs 2,000 notes with Rs 500 notes. Though there is no official confirmation from the Reserve Bank of India (RBI) or other authorities, it is assumed that this could be part of the strategy of the central bank to keep a tab on the total amount of high-value currency in circulation.
Cassettes which hold Rs 2,000 notes in ATMs will be replaced with notes of Rs 100 or Rs 200 denominations, according to a report on The Business Standard. Out of the four cassettes within ATMs, three will have Rs 500 notes, and the fourth will be filled with Rs 100 or Rs 200 notes. Many ATMs have already replaced cassettes holding Rs 2,000 notes, while many are in the process to complete it within a year’s time, the report added.
As per bank officials, the highest-value currency will remain a legal tender, but it will gradually be phased out of circulation.
Last week, Indian Bank had said that it will no longer keep Rs 2,000 notes in its ATMs, citing public inconvenience, who found it hard to exchange the notes. The decision will come into effect on March 1. However, the bank’s branches will continue to offer Rs 2000 notes.
As per an RTI query in October last year, the printing of Rs 2,000 currency notes had been stopped for the preceding 18 months. The central bank printed 354.30 crore Rs 2,000 notes in the financial year 2016-17, which declined to 11.15 crore in 2017-18 and further plunged to 4.67 crore in the year 2018-19, the RTI query had revealed. It also revealed that not a single Rs 2,000 note has been printed in current financial year.
According to RBI data, the share of Rs 2,000 notes in the total bank notes in circulation plunged to 3 per cent in 2018-19 against 3.3 per cent in 2016-17, that is, immediately after the demonetisation of old currency notes of Rs 1,000 and Rs 500. In terms of value, the share of Rs 2,000 notes was 50.2 per cent in 2016-17, which later fell to 31.2 per cent in 2018-19.
The value of all Rs 2,000 notes issued in 2016-17 stood at Rs 6,57,100 crore; only Rs 15,500 crore worth fresh Rs 2,000 notes were added in 2017-18, taking the total to Rs 6,72,600 crore.
The central bank had introduced Rs 2,000 note after the government announced demonetisation to ban old Rs 500 and Rs 1,000 notes on 8 November 2016.