RBI grapples with cash demand amid India's digital payments
The Reserve Bank of India (RBI) is having a tough time figuring out how much cash people actually need, thanks to the rise of digital payments.
Deputy Governor SC Murmu explained that even though fewer people are using cash for everyday purchases, the total amount of currency in circulation is still growing quickly.
This mix makes it tricky for the RBI to decide how many new notes to print and distribute.
India holds 176 billion banknotes
India has a massive 176 billion banknotes in circulation, far more than the US dollar and the euro combined, partly due to the higher weightage on lower-value notes, which means more pieces change hands for the same value of transactions.
While digital payments are booming, older folks, low-income groups, and small businesses still rely heavily on cash.
To keep up with demand (and help the environment), the RBI is testing things like polymer notes and special coatings so bills last longer and create less waste.