Is Currency in Circulation Reaching an Unprecedented Rs 40 Lakh Crore Amid UPI Expansion?
Synopsis
In a remarkable development, India's currency in circulation has hit Rs 40 lakh crore, marking a significant year-on-year growth. As UPI transactions continue to soar, this trend highlights the evolving financial landscape. Discover the implications of this shift and the future of cash in India's economy.
Key Takeaways
Currency in circulation has reached a historic Rs 40 lakh crore.
The year-on-year growth rate increased to 11.1 percent .
UPI transactions now exceed cash circulation in India.
The cash-to-GDP ratio has decreased significantly.
Bank deposits and advances have shown substantial growth.
Mumbai, Feb 16 (NationPress) The currency in circulation (CiC) in India has soared to a remarkable Rs 40 lakh crore by the end of January 2026, reflecting a year-on-year growth that has surged to 11.1 percent from last year's 5.3 percent, as reported on Monday.
According to the SBI Research report, the currency with the public (CWP), which constitutes 97.6 percent of the circulating currency, attained an unprecedented level of around Rs 39 lakh crore. Concurrently, CiC experienced an increase of Rs 2.76 lakh crore, marking a growth of 3.11 times during the same timeframe.
At the current trajectory, the currency with the public is projected to exceed the post-pandemic FY21 incremental growth of Rs 4.6 lakh crore, as noted in the report.
The report emphasizes that the value of UPI transactions significantly surpasses the currency circulation in India. The one-month UPI transaction value approached Rs 28 lakh crore, representing approximately 70 percent of the economy’s total currency supply, highlighting the substantial volume of digital payments in contrast to cash.
The cash-to-GDP ratio has decreased to 11 percent in FY26 from 14.4 percent in FY21.
The report states, "While the trends in currency and GDP may align, the incremental GDP growth is increasingly being financed through UPI rather than cash."
The growth rate of reserve money fell to 5.8 percent, attributed to a reduction in the CRR that decreased the 'Bankers Deposits with RBI' component by Rs 1.86 lakh crore in the current fiscal year.
Another recent report from SBI Research highlighted that bank deposits and advances nearly tripled from FY15 to FY25, indicating a deepening of the banking system and a revival in credit intermediation.
Deposits escalated from Rs 85.3 lakh crore to Rs 241.5 lakh crore, while advances increased from Rs 67.4 lakh crore to Rs 191.2 lakh crore over the FY15–FY25 period.
According to the report, bank asset growth rebounded from 77 percent of GDP to 94 percent by FY25, reflecting a renewed phase of financial deepening.
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Point of View
It is evident that digital payment systems are becoming vital to the economy. This trend reflects a broader shift towards modernization and efficiency in financial transactions, aligning with global practices.
NationPress
20 Jun 2026
Frequently Asked Questions
What is the current currency in circulation in India?
As of January 2026, the currency in circulation (CiC) in India has reached an all-time high of approximately Rs 40 lakh crore.
How has the growth rate of currency in circulation changed?
The year-on-year growth rate of currency in circulation has accelerated to 11.1 percent, up from 5.3 percent last year.
What role does digital payment play in India's economy?
The report indicates that UPI transactions have significantly surpassed cash circulation, with UPI transactions valued at Rs 28 lakh crore, which is about 70 percent of the total currency stock.
How has the cash-to-GDP ratio changed?
The cash-to-GDP ratio has declined to 11 percent in FY26 from 14.4 percent in FY21.
What does the report say about bank deposits and advances?
The report notes that bank deposits and advances have nearly tripled from FY15 to FY25, indicating a deepening of the banking system.
