Despite the increasing use of UPI for payments in Digital India, people's obsession with cash remains undiminished. This is why cash reserves in the market have reached a record 42.55 lakh crore rupees.
Cash in circulation
Ten years since demonetization will be completed on November 8, 2026. Many things have changed in these ten years, and digitalization has gained momentum. People are now using UPI for payments. Despite this, the craze for cash remains undiminished.
According to the latest data from the Reserve Bank of India (RBI), the public's cash holdings have reached a record ₹42.55 lakh crore as of October 15, 2026, an increase of approximately 137% from the ₹17.97 lakh crore recorded just before demonetisation in November 2016. This figure is surprising because while UPI and digital payments are at historic highs in the country, cash remains king.
The journey of cash in the last 10 years after demonetisation
November 2016 (just before demonetisation) – ₹17.97 lakh crore
January 2017 (lowest level immediately after demonetisation) – 7.80 lakh crore
October 2026 (present situation after 10 years) – 42.55 lakh crore
Prime Minister Narendra Modi announced demonetisation at 8 pm on November 8, 2016. Following this, existing 500 and 1,000 rupee notes were made legally invalid from midnight on November 9.
At that time, these two notes accounted for approximately 86% of the total currency in circulation. Their sudden withdrawal from the market led to a severe cash shortage. Consequently, the cash holdings of the public, which stood at ₹17.97 lakh crore on November 4, 2016, fell to ₹7.8 lakh crore in January 2017, following the demonetization announcement. However, cash gradually returned to the market after this.
Why is cash roaring in the era of UPI?
Even though people are increasingly adopting UPI these days, there are still many sectors where cash demand remains high. Cash transactions are still a priority, particularly in rural areas, real estate, agriculture, and the unorganized sector.
Over the past ten years, the country's GDP has grown and the population has increased. Consequently, the overall demand for money in the economy has also increased. While digital payments have increased, the absolute demand for cash has also increased due to the expansion of the overall market.
The massive printing of new ₹500 and ₹2000 notes immediately after demonetization significantly increased the flow of cash in the market, in terms of value. Although ₹2000 notes were later withdrawn in May 2023, they had already been completely replaced by ₹500 notes. According to the latest RBI data, ₹500 notes alone currently account for approximately 85.5% of the total cash in circulation. =
