The great cash mystery is giving RBI a headache

Kolkata: The Reserve Bank of India is facing a challenge in predicting the future demand for currency notes as the currency in circulation has been growing at double-digit rates despite growing popularity of digital payments, deputy governor SC Murmu said.

“Currency in circulation continues to grow at double-digit rates even as cash’s share of individual transactions declines, thanks to growing digital payment adoption. That combination makes future demand harder to predict. It complicates our planning for production and distribution capacity,” Murmu said at a gathering of central bankers held in Jakarta on August 13.

He said that the adoption of digital payments in India has been revolutionary, yet cash in circulation has not declined, especially in rural and semi-urban areas, among low-income groups, older populations, and small businesses.

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