Assessing the Impact of India's Rs 2,000 Note Withdrawal

The RBI's decision to withdraw Rs 2,000 notes will likely be a "non-event" due to the rise of digital transactions in India, according to an SBI Research report. The report said that the decision will actually have a favourable bearing on liquidity, bank deposits and interest rates. The share of small denomination notes (upto Rs 100) in total has declined progressively to 9.0% from 26.7% in 2017 in value terms and to 58.8% from 90.8% in 2017 in volume terms. Meanwhile, UPI has emerged as the most popular and preferred payment mode in India accounting for about 73% of the total digital payments.