10 years after note ban, India’s cash holdings more than double to ₹42.55 lakh crore despite digital payments

Ten years after demonetisation, currency with the public has risen to ₹42.55 lakh crore as of October 15, 2026, nearly 137% higher than the ₹17.97 lakh crore recorded before the note ban in November 2016. The rise comes despite the rapid growth of digital payments and the government’s push to reduce dependence on cash, according to a report published by The Indian Express on Tuesday.

This has happened even as digital payments have grown rapidly and the government has pushed for a less-cash economy. The data shows that while demonetisation led to a sharp fall in cash holdings initially, the money in circulation has steadily recovered and is now far above its pre-note-ban level.

What happened after the ₹500, ₹1,000 note ban

Prime Minister Narendra Modi announced demonetisation at 8 pm on November 8, 2016. The existing ₹500 and ₹1,000 notes were made invalid as legal tender from midnight on November 9.

The two denominations accounted for approximately 86% of the currency in circulation at the time. Their sudden withdrawal triggered a severe cash shortage, affecting shops, businesses, offices and households.

Currency with the public, which stood at ₹17.97 lakh crore on November 4, 2016, plunged to ₹7.8 lakh crore in January 2017 following the announcement.

The government had projected demonetisation as a way to fight black money, counterfeit currency and the financing of illegal activities. It was also expected to speed up digital payments, encourage formalisation and reduce dependence on cash.

But the fall in cash did not last.

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Cash comes roaring back

Over the following years, currency with the public steadily increased. The printing of new ₹500 and ₹2,000 notes, higher cash holdings and a continued preference for cash across large parts of the economy pushed the amount of currency with the public well above its pre-demonetisation level.

Cash holdings rose particularly sharply in 2020-21, when the government announced a stringent lockdown to tackle the spread of Covid-19. People accumulated cash for groceries and other essential expenses, including medical bills.

During calendar year 2026, as of October 16, cash with the public increased by ₹5.26 lakh crore, or 14.1%, according to RBI data.

What the cash-to-GDP ratio tells us

The amount of cash in the economy has to be seen alongside the size of the economy. The currency-to-GDP ratio rose to 14.4% in 2020-21 from 8.7% in 2016-17.

It then declined in the following years, reaching 11.7% in 2024-25 before rising to 12.3% in 2025-26.

The ratio stood at 12.1% in FY26, the same as in March 2016.

The rise in currency in circulation in absolute terms does not tell the full story, as GDP has also grown strongly. GDP growth touched 7.8% in the first quarter of FY26.

How India compares with other countries

India’s currency-to-GDP ratio is higher than that of some major economies.

The ratio is over 16% in Japan, 7.3% in the US, where the dollar also circulates internationally, and 10.2% in China.

The numbers suggest that the rise of digital payments has not pushed cash out of the Indian economy. A decade after demonetisation, physical currency remains a major part of how Indians hold and use money.

India’s currency-to-GDP ratio

2017-18: 10.7%
2018-19: 11.3%
2019-20: 12.2%
2020-21: 14.4%
2021-22: 13.3%
2022-23: 12.9%
2023-24: 12.1%
2024-25: 11.7%
2025-26: 12.3%