The Reserve Bank of India (RBI) recently released its annual report, shedding light on the trends and developments in the country’s banknote circulation for the fiscal year 2022-23. Notably, the report highlighted a 7.8 percent increase in the value of banknotes in circulation, accompanied by a 4.4 percent rise in volume. These figures mark a slight decrease compared to the previous year’s growth rates of 9.9 percent and 5 percent, respectively.
In terms of value, the report revealed that the combined share of Rs 500 and Rs 2,000 banknotes accounted for 87.9 percent of the total value of banknotes in circulation as of March 31, 2023. This represents a marginal increase from the previous year’s 87.1 percent. However, the RBI has announced the withdrawal of the Rs 2,000 notes, and individuals holding this high-value currency have been given until September 30 to exchange or deposit them.
Regarding volume, the Rs 500 denomination held the highest share at 37.9 percent, followed by Rs 10 denomination banknotes at 19.2 percent of the total banknotes in circulation as of March 31, 2023. The report highlighted that there were 5,16,338 lakh pieces of Rs 500 denomination notes totaling Rs 25,81,690 crore, representing an increase from the previous year’s 4,55,468 lakh pieces.
Furthermore, the report mentioned the decline in the circulation of Rs 2,000 notes, which accounted for 1.3 percent of the total currency in circulation by volume, compared to 1.6 percent in the previous year. Similarly, in value terms, the share of Rs 2,000 notes decreased to 10.8 percent from 13.8 percent as of March 2022.
Aside from banknotes, the RBI also introduced e-Rupee during the fiscal year 2022-23 on a live-pilot basis. As of March 31, 2023, the value of e-Rupee-Wholesale and e-Rupee-Retail in circulation stood at Rs 10.69 crore and Rs 5.70 crore, respectively. This digital initiative aims to enhance the efficiency and convenience of financial transactions.
The report also highlighted an increase in the counterfeit notes detected in certain denominations. Counterfeit notes in the denominations of Rs 20 and the new design of Rs 500 witnessed an 8.4 percent and 14.4 percent increase, respectively. However, there was a decline in counterfeit notes of Rs 10, Rs 100, and Rs 2,000 by 11.6 percent, 14.7 percent, and 27.9 percent, respectively.
The RBI’s annual report provides valuable insights into the changing dynamics of banknote circulation in India. With the withdrawal of the Rs 2,000 notes and the introduction of e-Rupee, the country is undergoing a significant transformation in its monetary landscape, aiming to improve security, efficiency, and digital financial inclusion.