- Currency in circulation in India grew to Rs 42.4 lakh crore by August 2025, up from Rs 37.2 lakh crore in FY25
- Cash usage doubled over a decade, rising from Rs 16.63 lakh crore in FY16 to Rs 41.65 lakh crore in FY26
- Cash remains preferred in non-metro areas, among low-income groups, older populations, and small businesses
India's cash economy keeps expanding briskly despite rising digital payments adoption, with currency in circulation (CIC) sustaining double-digit growth, RBI Deputy Governor Swaminathan J (Shirish Chandra Murmu) said.
The RBI currently has around 17,600 crore banknotes in circulation. The central bank prints roughly 2,800-3,000 crore banknotes a year and disposes of nearly 2,100 crore pieces, he said.
CIC stood at about Rs 42.43 lakh crore as on August 7, up from Rs 37.24 lakh crore in FY25 to Rs 41.65 lakh crore in FY26. The currency stock has more than doubled in a decade, from Rs 16.63 lakh crore in FY16 and Rs 24.47 lakh crore in FY20.
Cash usage keeps climbing even as digital transactions, particularly via UPI, surge.
RBI data shows that cash usage has steadily increased over time
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What's Driving The Rise?
Cash remains dominant in non-tier-I cities and among low-income groups, Murmu said, with older populations and small businesses also leaning heavily on physical currency. Rising incomes outside metros are further fuelling consumption—and cash demand.
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Ministry of Statistics and Programme Implementation data shows rural monthly per capita consumption expenditure (MPCE) jumped 164% over the past decade, pointing to a sharp rise in rural consumption capacity.
ATM withdrawals tell the same story: average monthly cash dispensation stood at around Rs 1.30 crore in calendar 2025, showing consumers still turn to physical currency despite wider digital access.
MDR On UPI
For small retailers, digital payment economics may also tilt the scales toward cash. Potential merchant discount rates (MDR) on UPI could make cash more attractive for thin-margin businesses.
The upshot: India's digital shift hasn't come at the expense of physical currency. Cash and digital payments are increasingly coexisting.
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