RS 2,000 NOTES: SBI RECEIVES RS 14,000 CR AS DEPOSITS, EXCHANGES RS 3,000 CR

The State Bank of India (SBI) has so far either deposited or exchanged an estimated Rs 17,000 crore worth of Rs 2,000 currency notes, the state-run lender's chairman Dinesh Kumar Khara said on Tuesday.

The Reserve Bank of India (RBI) on May 19 announced the withdrawal of Rs 2,000 notes, the highest denomination in circulation, but said it would continue to be a legal tender. The central bank, however, encouraged people to exchange and deposit the notes by September 30. The process to deposit/exchange began on May 23.

The SBI chairman on Tuesday informed that his bank had received around Rs 14,000 crore worth of Rs 2,000 currency notes as deposits, while notes worth Rs 3,000 crore were exchanged through the branch network, according to The Hindu. "Generally, we are about 20 percent of the market," he said.

A day before the process began, RBI Governor Shaktikanta Das said most of the withdrawn Rs 2,000 rupee notes were expected to be returned by September 30. He said the decision was part of currency management and Rs 2,000 rupee notes were introduced primarily to replenish the currency that was withdrawn following the demonetisation in 2016.

"We expect most of Rs 2,000 banknotes to come back to the exchequer by September 30,” he said, adding that the system had more than adequate quantities of printed notes already available and there was no reason for worry. "We have sufficient stocks, no need to worry."

About 89 per cent of the Rs 2,000 denomination banknotes were issued prior to March 2017 and were at the end of their estimated life span of 4-5 years.

The total value of these banknotes in circulation declined from Rs 6.73 lakh crore on March 31, 2018 to Rs 3.62 lakh crore constituting only 10.8 per cent of notes on March 31, 2023.

SBI's latest research - Ecowrap - today shared some findings on the initial trends of Rs 2,000 notes. In a five-page report, Ecowrap said around 80 per cent of the total Rs 2,000 notes received were deposited and the rest 20 per cent were exchanged for smaller denominations.

"Even if a fraction of these trends are extrapolated at ASCB (All Scheduled Commercial Bank) level, then the banking system liquidity is likely to increase significantly compared to our earlier estimates of ~Rs 1 trillion bulge in deposits," it said. "However, this is based on the current available information and might change depending on further data. The bottom line, however, is that the interest rate cycle might have peaked decisively."

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2023-05-30T12:12:43Z dg43tfdfdgfd