Record Surge in Currency in Circulation
India’s currency in circulation (CiC) reached a historic high of around ₹40 lakh crore by the end of January 2026, marking a significant surge in the amount of physical cash circulating in the economy. According to a report by SBI Research, this reflects a year-on-year growth of 11.1 percent, up from 5.3 percent in the previous year.
The majority of this currency — nearly 97.6 percent — was held by the public, with currency with the public (CWP) reaching approximately ₹39 lakh crore. This growth indicates increased confidence in using physical cash alongside digital payments.
UPI Outpaces Cash in Value of Transactions
Despite the record cash stock, digital payments powered by the Unified Payments Interface (UPI) continue to dominate India’s payment landscape. Latest data shows that one-month UPI transactions reached about ₹28 lakh crore, which is around 70 percent of India’s total currency stock. This highlights how digital channels are now deeply embedded in everyday economic activity.
Financial analysts note that digital payments have grown at a much faster pace than cash circulation, reflecting a transformational shift toward non-cash transactions. UPI’s growth underscores this trend, with its transaction volumes and values expanding rapidly as consumer adoption increases.
Cash-to-GDP Ratio Trends
The cash-to-GDP ratio — a measure comparing the amount of currency in circulation to the size of the economy — has declined from 14.4 percent in FY21 to about 11 percent in FY26. This decline suggests that digital payments and banking penetration are reducing reliance on cash relative to overall economic activity.
Economists view this as a positive signal of financial digitisation, where the public increasingly depends on electronic payments, mobile banking, and UPI for a wide range of transactions, from retail purchases to utility payments.
Growing Confidence in Both Cash and Digital Systems
The simultaneous rise in both cash holdings and digital transactions shows that India’s financial ecosystem is diversifying. While cash continues to play an essential role in the economy, especially in rural regions and informal sectors, digital payments are rapidly becoming the preferred mode for convenience, speed, and transparency.
UPI’s evolution has positioned India as a global leader in real-time digital payments, outpacing many countries in terms of volume and adoption.
Implications for Businesses and Consumers
The record CiC and strong digital ecosystem have significant implications:
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Consumers benefit from greater payment choices and financial inclusion.
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Businesses can reach customers through both cash and digital channels.
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Banks and fintech companies are expanding services to accommodate evolving payment behaviors.
As India navigates its digital payment future, the co-existence of high currency circulation and rising UPI transactions paints a complex but optimistic picture of economic participation across urban and rural landscapes.
