Currency in circulation grew by 9.9 per cent in value terms and 5 per cent in volume terms in 2021-22. However, the value and volume of ₹2,000 banknotes came down as the RBI has not printed notes in this denomination for the fourth year running

According to the Annual Report 2021-22 of the Reserve Bank of India, the value and volume of banknotes in circulation increased by 9.9 per cent and 5 per cent, respectively, during 2021-22, compared with 16.8 per cent and 7.2 per cent, respectively, during 2020-21.

Banknotes in circulation amounted to 13.05 lakh in volume terms and ₹31,05,721 crore in value terms in 2021-22, against 12.43 lakh notes in volume and ₹28,26,863 crore in value in 2020-21.

“The focus of currency management during the year continued on making available adequate quantity of clean notes in circulation, especially in the backdrop of the second wave of the Covid-19 pandemic,” said the report, adding that the Reserve Bank made an attempt to gauge trends and preferences in public usage of banknotes with a view to optimise the currency management operations.

In value terms, the share of ₹500 and ₹2,000 banknotes together accounted for 87.1 per cent of the total value of banknotes in circulation as on March 31, 2022, against 85.7 per cent as on March 31, 2021, it further said.

In volume terms, the ₹500 denomination constituted the highest share at 34.9 per cent, followed by ₹10 denomination banknotes, which constituted 21.3 per cent of the total banknotes in circulation as on March 31, 2022.

₹2,000 bank notes

According to the report, the volume of ₹2,000 banknotes in circulation was 21,420 lakh last fiscal, representing 1.6 per cent of the total volume of bank notes in circulation. It was higher at 24,510 lakh in 2020-21 and 27,398 lakh in 2019-20.

The total value of ₹2,000 bank notes in circulation was ₹4,28,394 crore in 2021-22, compared to 4,90,195 crore in 2020-21.

Significantly, a banknote survey of consumers by the RBI revealed that among banknotes, ₹100 was the most preferred, while ₹2,000 was the least-preferred denomination.

Among coins, denomination of ₹5 was the most preferred, whereas ₹1 was the least preferred, said the RBI report.

A diverse sample of 11,000 respondents from rural, semi urban, urban and metropolitan areas, spanning 28 States and three UTs participated in the survey.

Going ahead, the Reserve Bank’s endeavour would be to further modernise the processing of banknotes, rationalise currency management processes, promote analytical research for strengthening the integrity of banknotes, frame a strategy for complete indigenisation of raw materials for banknote production, increase public awareness through technological aids, and study the public usage of cash, coins and digital mode through a pan-India survey, said the report.

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