Currency In Circulation Rises In Value, Volume In FY23, Says RBI's Annual Report

The RBI's annual report said that the value and volume of currency in circulation rose by 7.8 per cent and 4.4 per cent, respectively, during the financial year 2022-23

The Reserve Bank of India's (RBI) annual report said that the value and volume of currency in circulation rose by 7.8 per cent and 4.4 per cent, respectively, during the financial year 2022-23 as compared with 9.9 per cent and 5.0 per cent, respectively, during 2021-22. It also revealed that the share of Rs 2,000 and Rs 500 banknotes in circulation accounted for 87.9 perccent in value in terms of the total circulation as on March 31, 2023. 

The central bank's annual report on Tuesday said, "Even though the currency-GDP ratio in India is moderating, it remains relatively at elevated levels vis-à-vis other major economies, widely referred to as currency demand paradox, particularly in the context of the exponential growth achieved in digital payments as a substitute of cash for effecting transactions. Since cash and digital modes are generally expected to substitute each other, the simultaneous rise in both seems counterintuitive."

In volume terms, Rs 500 denomination constituted the highest share at 37.9 per cent, followed by Rs 10 denomination banknotes which constituted 19.2 per cent of the total banknotes in circulation as on March 31, 2023. The circulation of Rs 2,000 banknotes showed a total value of Rs 3.62 lakh crore, constituting only 10.8 per cent of notes in circulation on March 31, 2022.

The Reserve Bank has recently announced the withdrawal of Rs 2,000 notes, and holders of the highest value currency have been given time till September 30 to exchange or deposit them.

According to the latest RBI report, there were 5,16,338 lakh pieces of Rs 500 denomination notes totalling Rs 25,81,690 crore at the end-March 2023. The number of Rs 500 notes at end-March 2022 was 4,55,468 lakh.

At the end of March 2023, there were a total of 4,55,468 lakh pieces of Rs 2,000 notes, which amounted to Rs 3,62,220 crore. In terms of the number of notes, the circulation of Rs 2,000 notes decreased to 1.3 per cent of the total currency in circulation, compared to 1.6 per cent in the previous year. Similarly, in terms of value, the share of Rs 2,000 notes also declined to 10.8 per cent from 13.8 per cent at the end of March 2022.

Presently, the banknotes in circulation comprise denominations of Rs 2, Rs 5, Rs 10, Rs 20, Rs 50, Rs 100, Rs 200, Rs 500, and Rs 2,000. Coins in circulation comprise those of 50 paise and Rs 1, Rs 2, Rs 5, Rs 10, and Rs 20 denominations.

The RBI also launched the e-Rupee during 2022-23 on a live-pilot basis. The value of e-Rupee-Wholesale and e-Rupee-Retail in circulation stood at Rs 10.69 crore and Rs 5.70 crore, respectively, as on March 31, 2023.

The total value of coins in circulation rose by 8.1 per cent in 2022-23, while the total volume increased by 2.6 per cent. As on March 31, 2023, coins of Rs 1, Rs 2, and Rs 5 together constituted 83.1 per cent of the total volume of coins in circulation, while in value terms, these denominations accounted for 72.3 per cent.

The RBI report said both indent and supply of banknotes for 2022-23 were marginally higher by 1.6 per cent than that of a year ago.

Like the previous years, there was no indent for the printing of Rs 2,000 notes. The report said that the indent and supply of banknotes by BRBNMPL and SPMCIL stood at 2,26,000 lakh and 2,26,002 lakh pieces, respectively.

The total expenditure incurred on security printing during 2022-23 was Rs 4,682.80 crore as against Rs 4,984.80 crore in the previous year.

The RBI also disposed of 4,824 lakh pieces of soiled Rs 2,000 notes in the last fiscal, up from 3,847 pieces in the preceding year. The report said that compared to 2021-22, there was an increase of 8.4 per cent and 14.4 per cent in the counterfeit notes detected in the denominations of Rs 20 and Rs 500 (new design), respectively.

The counterfeit notes detected in the denominations of Rs 10, Rs 100, and Rs 2,000 declined by 11.6 per cent, 14.7 per cent, and 27.9 per cent, respectively. "During 2022-23, out of the total Fake Indian Currency Notes (FICNs) detected in the banking sector, 4.6 per cent were detected at the Reserve Bank and 95.4 per cent at other banks," the report said.