Even as the adoption of digital payments in India has risen sharply over the last decade, cash in circulation has not declined, especially in rural and semi-urban areas, among low-income groups, older populations, and small businesses, Reserve Bank of India (RBI) Deputy Governor Shirish Chandra Murmu said in a speech at an event organised by Bank Indonesia in Jakarta, on August 13.
“Currency in circulation continues to grow at double-digit rates even as cash's share of individual transactions declines, thanks to growing digital payment adoption. That combination makes future demand harder to predict, which complicates our planning for production and distribution capacity,” he said.
Over the past few years, the deputy governor said RBI has produced between 28 and 30 billion banknotes annually across six denomination and disposed roughly 21 billion pieces a year. Currently, 176 billion banknotes are in circulation in India.
ALSO READ: RBI Special Window: FCNR(B) Inflows Could Have Crossed $100 Billion By Sept 30
By comparison, roughly 56 billion US dollar bills and 30 billion euro banknotes were in circulation at the end of last year.
“One caveat, in fairness to the comparison: our count is driven partly by a denomination mix weighted toward lower-value notes, which naturally means more pieces change hands for the same value of transactions. Even so, the volume gives you a sense of the scale of the logistics we manage every day,” he said.
To ensure durability of currency, the RBI is exploring ways to extend the life of banknotes, including surface coatings on the substrate, and polymer notes for lower denominations. The regulator is also working to reduce the carbon footprint of the cash cycle: optimising our distribution network for efficiency and moving up the value chain in how we dispose of banknote briquettes.
ALSO READ: BSE Hit By Triple Whammy Of STT, RBI Norms And CAS - Jefferies Sees 16% Downside
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
