Finshots Daily If UPI dominates, why is cash still growing?
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Mar 13, 2026 A look at why cash circulation rose even as digital payments surged. They trace UPI’s post-demonetization boom and explain how cash-to-GDP fell while absolute cash grew. Stories include GST-driven cash withdrawals, low interest rates encouraging cash hoarding, and gold loans putting notes back into the market. They also note UPI replaced small payments but not high-value notes.
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Host's ATM Thought After Demonetisation
- The host recalls ATMs prompting two thoughts: keep cash for emergencies and wonder who still uses ATMs.
- The 2016 demonetisation shock accelerated UPI adoption as businesses adopted QR codes and payment machines.
Rising Cash But Falling Cash Share
- Cash in circulation rose from ₹17.77 lakh crore (Nov 2016) to over ₹40 lakh crore (Feb 2026) even as UPI volumes grew massively.
- The cash-to-GDP ratio fell from ~14% to ~11%, showing cash grew slower than the economy while digital payments expanded.
UPI Transaction Value Versus Cash Stock
- UPI processes roughly ₹28 lakh crore per month, about 70% of the total physical currency stock each month.
- Thus digital payments handle enormous transaction volumes even as cash stock grows in absolute terms.