No plans to withdraw Rs 500 notes or re-introduce Rs 1,000 notes, ask public not to speculate: RBI Governor

The Reserve Bank of India (RBI) has no plans to withdraw Rs 500 currency notes from circulation or re-introduce Rs 1,000 notes, Governor Shaktikanta Das said on Thursday. 

The central bank last month withdrew Rs 2,000 currency notes, which were introduced after the 2016 demonetisation, from circulation. The withdrawal of the highest denomination sparked speculation that it may re-introduce Rs 1,000 notes.

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However, the Governor today clarified that the central bank had no such plan. "The RBI is not thinking of withdrawing Rs 500 notes, or re-introducing notes in Rs 1,000 denomination; request public not to speculate," Das said at a press conference after the second monetary policy committee meeting for FY24.

Das also said that 50 per cent of the Rs 2,000 notes in circulation have come back. The value of the notes that have been returned is Rs 1.82 lakh crore.

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"Total Rs 3.62 lakh crore of Rs 2,000 banknotes were in circulation. After the announcement, about Rs 1.8 lakh crores of Rs 2,000 banknotes have come back. This is roughly about 50 per cent of the Rs 2,000 banknotes, which were in circulation...," he said.

Of the returned Rs 2,000 notes, 85 per cent of the notes have come back as bank deposits, while the rest are for exchange, the Governor said.

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In a surprise announcement on May 19, the RBI withdrew its highest-value currency note from circulation but said the currency will continue to be legal tender. The central bank said people can deposit or exchange for lower denomination notes till September 30 for up to Rs 20,000 at a time.

Days after the withdrawal announcement, the RBI governor had said the majority of the withdrawn Rs 2,000 currency notes were expected to be returned to the banking system by the September 30 deadline.