ATMs starts dispensing more of ₹500 instead of ₹2,000

RBI in an RTI response last year had said that the central bank had stopped printing ₹2,000 denomination currency notes.

Banks have started dispensing more of ₹500 notes instead of ₹2,000 denomination notes, a move seen as gradual phasing out of the high denomination currency.

The Reserve Bank of India (RBI) in an RTI response last year had said that the central bank had stopped printing ₹2,000 denomination currency notes.

Although there has been no dictate from the Finance Ministry, banks on their own have decided to fill their ATMs with smaller denomination notes for the convenience of customers, sources said.

Some banks have already started recaliberation of their ATMs and other banks will also follow the suit, sources said.

State-owned Indian Bank has already announced that its has decided to stop using ₹2,000 notes in their ATMs.

Getting change for a ₹2,000 note is an issue, keeping that in mind some banks have stopped using ₹2,000 notes in their ATMs.

According to the RBI’s RTI reply, 3,542.991 million notes of ₹2,000 denomination were printed during 2016-17.

However, 2017-18 saw a substantial reduction in printing and only 111.507 million notes were produced, which further reduced to 46.690 million notes in 2018-19.

This indicates that while these high denomination notes would continue to be a legal tender but will be phased out eventually.

The move is seen as an attempt to prevent hoarding of the high-value currency and thus, curb black money. The government had in November 2016 demonetised ₹1,000 and ₹500 denominations notes.

Replying to a question in Parliament, Minister of State for Finance Anurag Singh Thakur in December said there is no proposal to withdraw ₹2,000 denomination notes.

“This is the real worry (about demonetisation) which has surfaced now. I think that you should not worry about it,” Mr. Thakur told the Rajya Sabha while replying to a question whether the government was planning to withdraw ₹2,000 notes in future.

According to the reply, notes in circulation (NIC) as on November 4, 2016 were ₹17,74,187 crore which have now increased to ₹22,35,648 crore as on December 2, 2019.

The NIC had grown at an average growth rate of 14.51% year on year wise since October 2014 till October 2016.

At this rate, NIC would have increased to ₹25,40,253 crore as on December 2, 2019.

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