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Informist, Tuesday, Aug. 18, 2026

MUMBAI – Rising currency in circulation poses a challenge, and it continues to grow at a double-digit rate even as cash's share in individual transactions has declined due to the growing adoption of digital payment, Reserve Bank of India Deputy Governor Shirish Chandra Murmu said at an event organised by Indonesia's central bank in Jakarta on Thursday. This makes future demand for cash harder to predict, and thus complicates the central bank's planning for production and distribution capacity, Murmu said, according to a release by the RBI Tuesday.

The second area that requires improvement on part of the central bank is note durability, the deputy governor said. "We are exploring ways to extend the life of banknotes, including surface coatings on the substrate, and polymer notes for lower denominations." On the third area of sustainability, Murmu said the RBI was working to reduce the carbon footprint of the cash cycle by optimising the distribution network and moving up the value chain in how it disposes of banknote briquettes.

Every year, the RBI runs a five-year forward projection of currency demand, based on two components--transactional and replacement demand. "Transactional demand is estimated from expected changes in currency in circulation, driven by GDP growth, interest rates, food inflation, and the pace of digital payment adoption, etc. Replacement demand is different: it reflects the need to retire older notes and keep the notes in people's hands fit for use," Murmu said. The replacement demand is governed by the Clean Note Policy, which commits the RBI to making good-quality banknotes available to every citizen, in the denomination and place of their choice.

As of today, 176 billion banknotes are in circulation in India, compared with 56 billion US dollar bills and 30 billion euro banknotes that were in circulation at the end of last year, the deputy governor said. "...in fairness to the comparison: our count is driven partly by a denomination mix weighted toward lower-value notes, which naturally means more pieces change hands for the same value of transactions." 

India has steadily built self-reliance when it comes to production, Murmu said. India's banknote paper mills, four currency printing presses, and ink production units are all owned and controlled by the RBI and the government, Murmu said. "That indigenisation is what lets us sustain the 28 to 30 billion pieces currency notes with high security features we print each year, across six denominations," the deputy governor said. "(C)ash remains a significant mode of payment in the Indian economy, and preserving trust in it, through clean notes, secure logistics, and a currency ecosystem people can rely on, is central to preserving monetary sovereignty itself."  End

Reported by Nandini Sinha

Edited by Akul Nishant Akhoury

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