India's Cash Paradox: Digital Boom, But Cash Demand Keeps Rising
What Happened
The RBI says it is finding it increasingly difficult to forecast cash demand because currency in circulation continues to grow at double-digit rates even as digital payments surge. Deputy Governor S.C. Murmu noted that cash usage remains strong in rural and semi-urban areas, among low-income groups, senior citizens and small businesses despite India's digital payments revolution.
Key Takeaways
India is witnessing a "cash paradox" where digital transactions are growing rapidly, but demand for physical currency has not fallen. This makes it harder for the RBI to plan banknote production, replacement and distribution, prompting exploration of longer-lasting polymer notes and other measures.