Cash Circulation Doubles in India as Digital Payments Surge Alongside

The Reserve Bank of India's Deputy Governor Shirish Chandra Murmu has highlighted the sustained expansion of physical currency circulation, noting that notes and coins in circulation have more than doubled since the 2015-16 financial year. The growth trajectory challenges conventional assumptions about the trajectory of cash usage in an increasingly digitalized economy.

Murmu's observation points to a distinctive feature of India's payments ecosystem, where traditional cash transactions continue to expand even as digital payment platforms gain rapid adoption. The doubling of currency in circulation reflects India's growing economy and expanding consumer base, alongside increased incomes and consumption patterns across the country.

The RBI official's comments suggest that both payment methods are reinforcing rather than displacing each other. While India has witnessed substantial growth in digital transactions through mobile wallets, bank transfers, and online payment platforms, particularly following the 2016 demonetization policy, the demand for physical currency has remained robust across rural and urban areas alike.

Analysts attribute the parallel growth to India's vast informal economy, geographically dispersed population with varying levels of digital connectivity, and consumer preferences that continue to favor cash for everyday transactions. The coexistence of thriving cash and digital systems reflects the country's staged transition toward a more diversified payments infrastructure.