Quick Summary
India's currency in circulation (CiC) has surged to an all-time high of nearly Rs 40 lakh crore, even as digital payments, particularly Unified Payments Interface (UPI) continue to expand at record pace. Fresh analysis by SBI Research suggests that the spike in cash usage may partly reflect temporary policy signals that nudged certain traders and consumers back toward physical currency. Currency in Circulation Grows 11.1% YoY In a report released on 16 February, SBI Research said currency i
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FAQ :
India's currency in circulation (CiC) has reached an all-time high of nearly Rs 40 lakh crore as of the fortnight ended 31 January 2026.
This record cash circulation has occurred even as digital payments, particularly UPI, continue to expand at a record pace, with UPI transaction value reaching approximately Rs 28.3 lakh crore monthly.
Possible reasons include temporary policy signals like GST notices issued to traders, broader macroeconomic and behavioural factors, rising precious metal prices potentially leading to liquidation for cash, and shifts in currency denomination after the withdrawal of Rs 2,000 notes.
Yes, analysis suggests that the issuance of GST notices to small traders may have had a temporary signalling impact, prompting some to rely more heavily on cash transactions.
No, despite higher absolute cash levels, cash as a percentage of GDP has declined to 11% in FY26, indicating deepening digital penetration.
UPI transactions continue to grow significantly and structurally reduce currency demand, even as overall liquidity expands. Digital platforms are still financing incremental GDP growth.
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