Six years after the government of India announced demonetisation on November 8, 2016, cash in hand with the public has hit a new high. Even as digital payments are recording sharp double-digit growth, cash as a payment mode continues to post strong growth.

Prime Minister Narendra Modi had announced the decision to withdraw Rs 500 and Rs 1000 denomination notes with the key objectives to promote digital payments and curb black money besides eliminating terror funding.

Also Read: Meta, parent company of Facebook, planning first major layoff in its history: Report

With cash remaining the preferred mode of payment, currency with the public increased to Rs 30.88 lakh crore as on October 21, 2022, from Rs 17.7 lakh crore on November 4, 2016, according to the latest Reserve Bank of India (RBI) data. The RBI data shows that demonetisation hasn’t dented the reliance of people on cash.

At Rs 30.88 lakh crore, currency with the public is 71.84% higher than the level for the fortnight that ended November 4, 2016.

Also Read: Rupee gains 45 paise to close at 81.90 against US dollar

As per RBI data, growth in currency in the one year to October 2022 at Rs 2.7 lakh crore, or a 9% increase, was higher than Rs 2.3 lakh crore or 8.5% increase in the same period the previous year.

Currency with the public refers to the notes and coins used by people to transact, settle trades, and for buying goods and services. The figure is arrived at after deducting cash with banks from the currency in circulation.

Also Read: Twitter delays launch of $8 subscription plan for blue ticks until end of midterms: Report

Cash continues to be the only mode of payment for nearly 20% of individuals who do not have a bank account. Also, some cash distribution companies have processed one of the highest amounts at ATMs this October.

The nationwide lockdown in 2020 following the COVID-19 pandemic led to a behavioral change in the habit of payments and settlements with people switching to digital platforms in a big way, resulting in lesser dependence on cash.

Also Read: US employers add 261,000 jobs in October, unemployment rate up at 3.7%

However, data shows that cash continues to be an important method of making payments. According to Cash management company CMS, all major states recorded robust growth in cash withdrawals. Among large and urbanized states Maharashtra logged 17% growth, Karnataka 13%, and Tamil Nadu 11% growth in October 2022 over October 2021. Similar trends were also seen in developing states such as Bihar 14% and Uttar Pradesh 13%.

Also Read: Bank of England raises benchmark rate by 75 bps, biggest hike in 30 years

CMS’s Cash Index for ATM rose 9% year-on-year and 13% over September. In October 2022, the total currency processed by CMS through its pan-India network in October 2022 was Rs 1.13 lakh crore, the highest ever for the company in a month. The month also witnessed the CMS Cash Index for ATM channel hitting an all-time high indicating the best Diwali ever, the company said in a statement.