Currency in Circulation Surges to Historic High
Mumbai, February 16: India’s currency in circulation has climbed to a record high of approximately Rs 40 lakh crore by the end of January 2026, according to a report released by SBI Research on Monday.The report noted that year on year growth in currency in circulation accelerated sharply to 11.1 per cent, compared with 5.3 per cent in the previous year, indicating a stronger expansion in cash usage over the past 12 months.
On an incremental year to date basis, the currency held by the public, which accounts for 97.6 per cent of total circulating currency, reached an all time high of around Rs 39 lakh crore. During the same period, currency in circulation rose by Rs 2.76 lakh crore, marking a 3.11 times increase.
Based on prevailing trends, the report said that currency held by the public is likely to exceed the incremental growth of Rs 4.6 lakh crore recorded in FY21 following the pandemic period.
UPI Transaction Value Remains Substantially Higher Than Cash Stock
The report highlighted the growing scale of digital payments, stating that the value of one month’s UPI transactions stood at approximately Rs 28 lakh crore. This is nearly 70 per cent of the total currency stock in the economy, underscoring the significant role of digital payment volumes relative to physical cash in circulation.It added that while both currency and GDP are moving in the same direction, the incremental expansion in GDP is increasingly being financed through UPI rather than cash.
Cash-to-GDP Ratio Declines Further in FY26
India’s cash to GDP ratio declined to 11 per cent in FY26, down from 14.4 per cent in FY21. This indicates a gradual shift in the composition of economic financing, with a reduced reliance on physical currency.At the same time, reserve money growth moderated to 5.8 per cent. The report attributed this to the CRR cut, which reduced the ‘Bankers Deposits with RBI’ component by Rs 1.86 lakh crore in the current fiscal year.
Banking System Deepens as Deposits and Advances Triple
In a separate assessment, SBI Research observed that deposits and advances in the banking system nearly tripled between FY15 and FY25, reflecting strengthening financial intermediation.Deposits rose from Rs 85.3 lakh crore in FY15 to Rs 241.5 lakh crore in FY25. Advances increased from Rs 67.4 lakh crore to Rs 191.2 lakh crore over the same period.
The report also noted that bank asset growth rebounded from 77 per cent of GDP to 94 per cent by FY25, signalling renewed financial deepening in the Indian economy.
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