Cash still has demand in times of digital push

Even as digital payments touch fresh peaks every month, cash still continues to have loyal users. Reserve Bank of India (RBI) data on currency in circulation shows that it has been a roller coaster ride for cash demand this year.

It rose sharply during elections and festivals and fell at the same pace subsequently.

An ET analysis shows that cash demand went up by Rs 87,000 crore from the date the Lok Sabha elections were announced in mid-March until the last phase of the election in the first week of June. Then, they fell by Rs 84,000 crore until end September.


Again, it climbed Rs 85,000 crore until early November ( November 8), coinciding with the major festival periods of Navratri and Diwali. It was also the period prior to the state assembly elections in Maharashtra and Jharkhand.

Currency in circulation (CIC) contracted Rs 20,000 crore in the subsequent three weeks. Significantly, it fell Rs 10,000 crore in just one week after the assembly election in the week ending November 29 .

The RBI commentary on the subject often cites the festival, elections and a good agriculture performance as contributors to cash demand.