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India's Cash Circulation Hits Record Rs 40 Lakh Crore Despite UPI Boom

Currency in circulation in India reached a record high of approximately Rs 40 lakh crore by the end of January 2026, showing accelerated year-on-year growth. Despite this cash surge, the value of UPI transactions for one month stood at about Rs 28 lakh crore, representing roughly 70% of the total currency stock. The cash-to-GDP ratio has declined significantly, indicating that incremental GDP growth is being financed less by cash and more through digital channels. Concurrently, bank deposits and advances have nearly tripled over the past decade, signaling a deepening of the formal banking system.

Key Points: Currency in Circulation Hits Record High as UPI Grows

  • Currency circulation hits Rs 40 lakh crore
  • UPI value is 70% of total cash stock
  • Cash-to-GDP ratio falls to 11%
  • Bank deposits nearly triple in a decade
2 min read

Currency in circulation hits record Rs 40 lakh crore even as UPI grows: Report

India's currency circulation reaches Rs 40 lakh crore, growing at 11.1%, while UPI transaction value remains significantly higher, indicating a digital shift.

"UPI transactions value is much higher than the currency circulation in India - SBI Research Report"

Mumbai, Feb 16

Currency in circulation in India reached an all‑time high of about Rs 40 lakh crore by January 2026 end, with year‑on‑year growth accelerating to 11.1 per cent from 5.3 per cent last year, a report said on Monday.

The report from SBI Research said on an incremental basis (YTD), the currency with public (CWP), accounting for 97.6 per cent of the circulated currency, reached an all time high of around Rs 39 lakh crore. Meanwhile, CiC surged Rs 2.76 lakh crore or 3.11 times in the same period.

At current trends, currency with the public is likely to surpass the post‑pandemic FY21 incremental growth of Rs 4.6 lakh crore, the report further said.

The report highlighted that "UPI transactions value is much higher than the currency circulation in India". One‑month UPI transaction value stood at about Rs 28 lakh crore, roughly 70 per cent of the economy's total currency stock, underscoring that digital payments volumes remain large relative to cash.

The cash‑to‑GDP ratio has declined to 11 per cent in FY26 from 14.4 per cent in FY21.

"The direction of change of currency and GDP may be the same, but incremental GDP growth is now being financed less by cash and more through UPI," the report said.

Reserve money growth declined to 5.8 per cent, due to the CRR cut which reduced the 'Bankers Deposits with RBI' component by Rs 1.86 lakh crore in the current fiscal year.

Another recent report from SBI Research said that deposits and advances in banks almost tripled from FY15 to FY25, signalling deepening of the banking system and renewed credit intermediation.

Deposits rose from Rs 85.3 lakh crore to Rs 241.5 lakh crore and advances climbed from Rs 67.4 lakh crore to Rs 191.2 lakh crore during FY15-FY25.

The bank asset growth rebounded from 77 per cent of GDP to 94 per cent by FY25, reflecting renewed financial deepening, the report said.

- IANS

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Reader Comments

S
Sarah B
As someone who moved to India for work, the coexistence of high-tech UPI and massive cash circulation is the most unique thing. You can pay for chai with QR code but a wedding gift is still expected in cash envelopes. The transition will take a generation.
A
Ananya R
While UPI growth is impressive, the record cash in circulation worries me. It often points to a large informal economy and maybe even black money. The government needs to incentivize digital payments more, especially for larger transactions. Tax benefits for fully digital businesses?
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Vikram M
My dadi (grandmother) still keeps her savings in cash at home, no matter how much we explain about banks. Trust in physical currency is deep-rooted in our culture. UPI is for daily use, but for big savings and emergencies, many Indians feel safer with cash in hand. It's about psychological security.
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Karthik V
The real story is the banking system growth! Deposits tripling in 10 years is huge. More money in banks means more loans for businesses and homes. That's how the economy grows. UPI and cash data are just two sides of the same financial deepening coin. Good report.
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Priya S
Respectfully, I think the headline is a bit misleading. It makes it sound like cash is beating UPI. But the article itself says UPI transaction value in a MONTH is 70% of ALL cash in the country. That's insane digital adoption! We should celebrate that more. 💳→📈

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