Withdrawal of Rs 2,000 notes a non-event as India’s digital payments ecosystem robust: SBI Research


NEW DELHI: The withdrawal of Rs 2,000 banknotes is unlikely to be an event as India has adopted digital payments on a large scale, he said SBI Research in his latest Ecowrap.
In digital payments, India has witnessed new milestones in both value and volume, demonstrating the resilience of our payments ecosystem and adoption.
“Our research suggests that rural and semi-urban areas now account for 60 percent of UPI value/volume, disproving the widely held notion that metro/urban areas are hotbeds for digital payment adoption and innovation,” states in According to the report authored by Ecowrap, Soumya Kanti Ghosh, the group’s chief economic adviser.
According to the report, the Rs 500 banknote has become the mainstream banknote, accounting for 73.3 percent of the total value of banknotes in March.
According to SBI Research, the central bank RBI has gradually reduced the share of the high value Rs 2000 note, paving the way for its complete removal from circulation.
The total value of these banknotes in circulation has fallen from 6.73 lakh crore rupees at its peak on 31 March 2018 (37.3 percent of banknotes in circulation) to 3.62 lakh crore rupees, which is only 10.8 percent of banknotes in circulation on 31 March 2018 March 2018. 2023, RBI said. About 89 percent of Rs 2,000 banknotes were issued before March 2017 and have reached the end of their estimated four to five year lifespan.
According to the RBI, the target of introducing Rs 2000 banknotes was met once banknotes in other denominations became available in sufficient quantity. Hence, the printing of Rs 2000 banknotes later ceased in 2018-19.
The Reserve Bank of India (RBI) on Friday decided to phase out the Rs 2,000 banknotes but added that they will remain legal tender. The RBI had also advised banks to stop issuing Rs 2,000 denomination notes with immediate effect.
However, RBI said citizens will still be able to deposit Rs 2,000 denomination notes into their bank accounts and/or exchange them for notes of other denominations at any bank branches until September 30, 2023.

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