India central bank says 88% of 2000-rupee notes returned since May

MUMBAI, Aug 1 (Reuters) - The Reserve Bank of India (RBI) said on Tuesday 88% of the countrys highest denomination 2000-rupee currency notes - worth 3.14 trillion rupees ($38.17 billion) - have been returned since its decision to withdraw them from circulation.

The RBI said in May it would withdraw these high-value notes, permitting their exchange or deposit until Sept. 30.

The total value of 2000-rupee notes in circulation was down to 3.56 trillion rupees as of May 19 from 3.62 trillion rupees as on Mar. 31 - the end of the last fiscal year - the central bank said in a statement.

Currently, 420 billion rupees worth of these notes are in circulation, it said.

Data collected from major banks indicate that about 87% of the banknotes received by lenders was in the form of deposits, while around 13% had been exchanged for other denominations, the RBI said.

The 2000-rupee denominated notes were introduced in 2016 with the intention to replenish the Indian economys currency in circulation after the governments shock move to demonetize the economy by scrapping high-value banknotes.

However, the central bank has frequently said that it wants to reduce high value notes in circulation and had stopped printing 2000-rupee notes over the past four years.

($1 = 82.2550 Indian rupees)