Currency in circulation in India soared to an all-time high of about Rs 40 lakh crore by the end of January 2026, marking a significant year-on-year growth of 11.1%, up from 5.3% the previous year, as per a report by SBI Research. The currency with the public, constituting 97.6% of the total circulated currency, also reached a peak of around Rs 39 lakh crore on a year-to-date basis, with a surge of Rs 2.76 lakh crore or 3.11 times during the same period.
According to the report, the current trajectory suggests that the currency held by the public is on track to exceed the incremental growth of Rs 4.6 lakh crore seen in the post-pandemic fiscal year 2021. The report also emphasized that the value of UPI transactions in India surpasses the currency circulation, with one-month UPI transaction value hitting about Rs 28 lakh crore, approximately 70% of the country’s total currency stock, indicating the significant volume of digital payments compared to cash transactions.
Furthermore, the cash-to-GDP ratio has decreased to 11% in fiscal year 2026 from 14.4% in fiscal year 2021. The report noted that while the direction of change in currency and GDP remains aligned, incremental GDP growth is now being funded less by cash and increasingly through UPI transactions.
Reserve money growth experienced a decline to 5.8% due to a CRR cut that reduced the ‘Bankers Deposits with RBI’ component by Rs 1.86 lakh crore in the current fiscal year. Another recent report from SBI Research highlighted a nearly threefold increase in deposits and advances in banks from fiscal year 2015 to fiscal year 2025, indicating a strengthening of the banking system and enhanced credit intermediation. Deposits surged from Rs 85.3 lakh crore to Rs 241.5 lakh crore, while advances climbed from Rs 67.4 lakh crore to Rs 191.2 lakh crore during the period of fiscal year 2015 to fiscal year 2025. The report also pointed out that bank asset growth rebounded from 77% of GDP to 94% by fiscal year 2025, reflecting a revitalized financial deepening.
