Following the Reserve Bank of India’s (RBI’s) decision to withdraw Rs 2,000 from circulation, deposits into the banking system rose by Rs 3.26 trillion to Rs 187.02 trillion in the fortnight that ended June 2, 2023.

In contrast, the deposits had reduced by Rs. 59,623 crore to Rs. 183.74 trillion in the previous fortnight ending May 19, 2023, according to RBI data. 

RBI Governor Shaktikanta Das, after announcing the monetary policy on June 8, 2023, said there were Rs. 3.62 trillion of ₹2,000 notes in circulation as of March 31, 2023. Roughly about half of that, about Rs. 1.8 trillion of ₹2,000 notes had come back after the withdrawal. 

According to RBI data, bank credit increased by Rs. 1.14 trillion to Rs. 140.08 trillion in the reporting fortnight, with the credit portfolio increasing by 15.4% year-on-year (YoY), up from 13.1% a year before. Meanwhile, liabilities increased 11.8% YoY as of June 2, up from 9.3% the previous year.

Credit offtake has remained robust despite the significant rise in interest rates and global uncertainties related to geo-political and supply chain issues. The growth has been broad-based across segments. According to rating agency CARE, credit growth is expected to sync with the country’s economic growth in FY24.