India, Feb 16 : Currency in circulation in India climbed to an all time high of nearly ₹40 lakh crore by the end of January 2026, registering year on year growth of 11.1 per cent, according to a report by SBI Research. The sharp rise comes despite the continued expansion of digital payment systems, particularly UPI.
The report noted that currency with the public (CWP), which makes up 97.6 per cent of total circulated cash, touched around ₹39 lakh crore on a year-to-date basis. During the same period, overall currency in circulation increased by ₹2.76 lakh crore more than three times the growth recorded in the previous comparable phase.
Analysts indicated that if current trends persist, incremental currency growth in FY26 could exceed the post-pandemic spike of ₹4.6 lakh crore seen in FY21.
Digital Payments Outpace Cash in Transaction Value
Even as cash levels hit record highs, digital transactions continue to dominate in value terms. Monthly UPI transactions were valued at approximately ₹28 lakh crore nearly 70 per cent of the total currency stock highlighting the scale at which digital payments operate relative to physical cash.
The report emphasised that while both GDP and currency growth are moving in the same direction, incremental GDP expansion is increasingly being financed through digital channels rather than cash. The cash to GDP ratio has declined to 11 per cent in FY26, compared to 14.4 per cent in FY21.
Reserve money growth moderated to 5.8 per cent, partly due to a cut in the Cash Reserve Ratio (CRR), which reduced bankers’ deposits with the RBI by ₹1.86 lakh crore during the current fiscal year.
Banking System Deepens Further
In a separate assessment, SBI Research highlighted significant expansion in India’s banking sector over the past decade. Between FY15 and FY25, deposits rose from ₹85.3 lakh crore to ₹241.5 lakh crore, while advances increased from ₹67.4 lakh crore to ₹191.2 lakh crore.
Banking assets rebounded from 77 per cent of GDP to 94 per cent by FY25, signalling renewed financial deepening and stronger credit intermediation across the economy.
The findings suggest that while cash usage remains robust in absolute terms, India’s financial ecosystem is increasingly being shaped by digital transactions and formal banking expansion.