Rs 36,500 crore lost from circulation in a week as soon as it was announced on Rs 2000 note

On May 19, the RBI had ruled that it had decided to withdraw Rs 2,000 notes from circulation, although legal tender would remain. The central bank said that people can deposit or exchange notes in banks from May 23 to September 30.

The Reserve Bank of India had announced the withdrawal of Rs 2000 notes and said that these notes are being taken out of circulation. In such a situation, all people should deposit 2000 rupee notes in banks by 30 September or go to any bank and exchange them with other notes. Since this announcement, currency circulation worth Rs 36,000 crore has evaporated in the country. This means that in the last one week more than 36 thousand crore rupees have been deposited in banks in the form of 2000 rupee notes.

Money coming back into the system

According to the new RBI data, on May 26, there was a currency of Rs 34.4 lakh crore in circulation, out of which a weekly decline of Rs 36,492 crore has been seen. Bank of Baroda Chief Economist Madan Sabnavis said that the reduction in reserve money and CIC is a clear indication that there is an amount of about Rs 36,000 crore which has been exchanged and subsequently withdrawn from the system. Sabnavis said that the fact is that Rs 2,000 notes received by banks have been given to RBI, which means that a large number of Rs 2,000 notes are being taken out of the system. Which is an indication of how much money is actually coming back into the system. Experts had estimated that out of Rs 3.6 lakh crore in Rs 2000 notes in circulation, around Rs 50,000 crore to Rs 1 lakh crore could be returned to the banking system.

Good note speed

Analysts said that going by the initial trends in the RBI data, the level of currency re-entering the banking system is quite high. HDFC Economist Abheek Baruah said he suspects the decline in CIC is due to the withdrawal of Rs 2,000 notes as it appears to have received around Rs 32,000 crore in deposits between the two big banks, so tally the numbers. are. He further said that I hope a part of it is because of him. Also, he said that the speed with which the notes are coming back is very good because if you look at the stock of Rs 2,000 notes, it is Rs 3.6 lakh crore.

Improvement in the liquidity position in the banking system

State Bank of India Chairman Dinesh Kumar Khara said on Monday that the country's largest bank has received Rs 2,000 notes worth Rs 14,000 crore so far and Rs 3,000 crore has been exchanged. According to Soumyajit Niyogi, director of India Ratings and Research, the recent improvement in the liquidity position in the banking system has also reflected the effect of the return of Rs 2,000 notes.

In the last three days, surplus liquidity in the banking system has crossed the 1 lakh-crore mark, currency market rates have come down and hence, the cost of borrowing in the economy has come down. HSBC economists Pranjul Bhandari and Ayushi Chowdhary wrote in a report after the RBI that about Rs 2.5-3 lakh crore of the banking sector's liquidity goes out in the form of currency in circulation every year. Thus, one can expect some comfort on the market liquidity front.