Short Description
Despite India’s digital payment boom, physical currency in circulation has hit a record ₹40 lakh crore, revealing cash’s enduring role in a modernizing economy.
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3 minutes 10 seconds
Main Article
In a striking testament to economic complexity, India’s currency in circulation has soared to ₹40 lakh crore (approximately $480 billion) as of February 2026. This milestone, reported by the Reserve Bank of India (RBI), arrives amidst unprecedented growth in digital payments, spearheaded by the ubiquitous UPI platform. The figure underscores a nuanced reality: while digital transaction volumes explode, the demand for physical cash continues its steady climb, highlighting a unique dual economy where ancient and modern payment methods thrive side-by-side.
This sustained appetite for cash is driven by several structural factors. A significant portion of India’s vast rural and semi-urban economy still operates on cash due to gaps in digital infrastructure and literacy, presenting ongoing financial inclusion challenges. Small vendors, street markets, and the informal sector heavily prefer cash for its immediacy, low cost, and reliability—especially as a critical fallback during technical outages that can disrupt digital wallets and UPI. Furthermore, analysts point to overall economic expansion and a deep-seated cultural trust in cash as a tangible, liquid asset. The RBI’s continuous focus on ensuring adequate currency supply reflects its necessity not just for transactions but as a store of value for millions.
For policymakers and financial observers, this trend carries significant implications. The coexistence of robust digital payments and high cash usage suggests that India’s journey toward a less-cash society will be gradual and layered. The RBI and government face the delicate task of balancing aggressive digital adoption drives with the pragmatic need to service a cash-dependent populace. The future likely points not to the disappearance of cash, but to a more integrated ecosystem where digital solutions grow in prominence for formal and larger transactions, while cash retains its stronghold in daily, small-value, and informal economic activities.
Short Summary
India’s record-high currency in circulation at ₹40 lakh crore, despite a digital payment revolution, reveals a complex dual economy. Cash remains vital due to infrastructure gaps, cultural preferences, and informal sector reliance. The path forward involves strengthening digital inclusion while acknowledging cash’s persistent role in ensuring economic resilience and accessibility for all segments of society.
