Five yrs since note ban, cash in circulation rises
Notes in circulation went up in the last fiscal as people opted to hold cash amid the Covid-19 pandemic
NEW DELHI: Five years after the demonetisation, currency notes in circulation continue to rise albeit at a slower pace even as digital payments surge with more and more people embracing cashless payment modes.
Primarily, banknotes in circulation went up in the last financial year as many people opted for the precautionary holding of cash amid the Covid-19 pandemic disrupting normal lives and economic activities in varying degrees.
Official data points out a jump in digital payments through different modes, including plastic cards, net banking and Unified Payments Interface. UPI of the National Payments Corporation of India (NPCI) is fast emerging as a major medium of payment in the country.
All said, currency notes in circulation are still in the upward curve.
On November 8, five years ago, Prime Minister Narendra Modi had announced the demonetisation of old ₹1,000 and ₹500 banknotes and one of the key objectives of the unprecedented decision was to promote digital payments and curb black money flows.
Thanks to the increasing popularity of digital payment ways, cash usage is not growing at a fast clip but still is on the rise.
According to the latest
Reserve Bank data, the notes in circulation in value terms soared from ₹17.74 lakh crore on November 4, 2016, to ₹29.17 lakh crore on October 29, 2021.
The notes in circulation (NIC) increased by ₹2,28,963 crore on October 29, 2021, from ₹26.88 lakh crore as on October 30, 2020. The year-on-year increase on October 30, 2020, was ₹4,57,059 crore. The data revealed the year-on-year increase in NIC on November 1, 2019, was ₹2,84,451 crore.
The value and volume of banknotes in circulation had increased by 16.8% and 7.2%, respectively, during 2020-21 as against an increase of 14.7% and 6.6%, respectively, witnessed during 2019-20.
The banknotes in circulation had increased during 2020-21, primarily on account of precautionary holding of cash by people due to the pandemic.
NIC had grown at an average growth rate of 14.51% year-onyear from October 2014 till October 2016, the month preceding the demonetisation.