Currency in circulation was down by 272.8 billion rupees ($3.30 billion) for week ended June 2, data from the Reserve Bank of India (RBI) on late Wednesday showed. It was down by 364.9 billion rupees in the week ended May 26. On May 19, the RBI had said it will start withdrawing 2,000-rupee denominated notes from circulation. People holding those notes were to deposit them in their respective bank accounts or exchange them for smaller denominations between May 23 and September 30. "It can be safely assumed that the banking system liquidity would increase by one trillion rupees to two trillion rupees gradually over the next few months," said Sandeep Bagla, chief executive officer at Trust Mutual Fund.

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Persons: Sandeep Bagla, Dharamraj Dhutia, Nivedita Organizations: Reserve Bank of India, Reuters Graphics Reuters, Reuters, Trust Mutual Fund, Thomson Locations: MUMBAI