SBI Report: Cash Circulation Rises to ₹40 Lakh Crore
Cash Use Remains Strong as Currency Touches ₹40 Lakh Crore, Says SBI: While digital payments are rapidly increasing in the country, cash usage is not far behind. According to the latest SBI Research report, the total value of currency in circulation (CiC) has reached a record high of nearly ₹40 lakh crore.
Significantly, this increase comes at a time when digital payments are becoming increasingly popular. People are increasingly adopting online payments for transactions. SBI Research has presented its latest report, detailing the main reasons behind this increase in cash usage.
1) Cash usage surges after GST notices:
The SBI Research report reveals that businesses have shifted from digital payments to cash. This is due to factors such as GST notices. According to the report, in July 2025, approximately 18,000 small businesses in Karnataka were sent GST notices based on UPI transactions.
Following this, many merchants appeared to shift away from digital payments and back to cash transactions. Data showed that cash withdrawals increased in that district after the GST notice. This figure increased by an average of ₹37 crore per month. This means that the decrease in digital payment acceptance increased cash flow.
2) Falling interest rates and the impact of rural consumption:
The SBI Research report explains the reasons for the continued need for cash through the money demand model. According to the report, the increasing use of UPI should generally reduce cash demand, but falling interest rates and increasing consumption in rural areas have offset this trend. This means that despite the increase in digital payments, the need for cash transactions has not completely disappeared.
3) Increased circulation of smaller notes:
According to the report, the share of ₹100, ₹200, and ₹500 notes in the country is increasing. The share of 500 rupee notes will increase to 86% by March 2025. The RBI has also directed banks to make more 100 and 200 rupee notes available in ATMs.
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