‘About 80% of Indians choose to deposit withdrawn ₹2,000 notes, boost bank deposits’

About three-fourths of Indians are choosing to deposit the recently withdrawn ₹2,000 notes into bank accounts so far rather than exchanging them for smaller denominations, with the trend likely to boost bank deposits, bankers said.

About three-fourths of Indians are choosing to deposit the recently withdrawn ₹2,000 notes into bank accounts so far rather than exchanging them for smaller denominations, with the trend likely to boost bank deposits, bankers said.

In May, the Reserve Bank of India (RBI) said it would withdraw these high-value notes from circulation and permitted their exchange or deposit until September 30.

Exchange is only permitted up to ₹20,000 per turn, while there is no limit on depositing the notes, which also earns interest.

When announced, the value of these notes in circulation was ₹3.6 trillion ($43.61 billion), the RBI said.

Though the total quantum of notes deposited or exchanged so far is not available, six public and private sector bankers Reuters spoke to said over 80% of the notes received by them have been deposited into accounts.

State Bank of India - the country's largest lender - had received about ₹170 billion in value terms in the first week since the exercise began on May 23, a senior official said.

Of this, ₹140 billion, or 82%, was deposited into accounts, while the rest was exchanged, he said.