Originals · Startup · Startups & Fintech
Ten years after demonetisation, UPI runs 241 billion payments a year but cash in circulation has more than doubled
The 8 November 2016 note ban was meant to push India away from cash. A decade on, official data show digital payments exploded while the stock of physical currency kept growing.
On 8 November 2016 the government withdrew the old Rs 500 and Rs 1,000 notes, which the RBI's March 2017 assessment put at 86.9 percent of the currency in circulation. Business Standard, citing Ministry of Finance data, said cash in circulation stood at Rs 17.77 trillion that day. By 23 October 2026 it had reached Rs 43.16 trillion, up nearly 143 percent, and RBI data show it ended FY26 at Rs 41.68 trillion after its biggest one year rise in absolute terms since FY18.
The digital side of the story moved far faster. NPCI data cited by Business Standard and a PIB note marking ten years of UPI show annual UPI volume rising from about 1.78 crore transactions in FY17 to 241.62 billion in FY26, while value grew from about Rs 7,000 crore to roughly Rs 314 trillion. UPI handled about 84 percent of India's digital payments in FY26, 86 percent of person to merchant payments were below Rs 500, and the number of live banks rose from 21 at launch to 756 by September 2026, when the network processed 24.07 billion transactions worth Rs 29.37 trillion.
Both trends can be true at once because they measure different things. Currency in circulation counts the cash that exists, not how often it changes hands, and households keep notes for emergencies and places where digital payments do not reach. Onmanorama, using RBI figures, noted that cash relative to GDP fell from 12.1 percent in 2015-16 to 8.7 percent after the note ban, jumped to 14.4 percent during the pandemic and is back near 12 percent in 2025-26. The same report recalled that Rs 15.3 lakh crore of the Rs 15.42 lakh crore in withdrawn notes, about 99.3 percent, came back to banks.
The RBI itself says the mix is hard to plan for. Deputy Governor Shirish Chandra Murmu said last month that currency in circulation keeps growing at double digit rates even as cash's share of individual transactions declines, which complicates production and distribution planning, the BBC reported. The Hindu, also drawing on RBI data, reported on the anniversary that detection of counterfeit notes, especially Rs 500 notes, has risen, while UPI value has grown steadily even as a share of GDP.
For India's digital economy the decade leaves a clear split: UPI has become the default rail for everyday small payments, but the country has not become less cash dependent in stock terms. Policy debates now running in parallel, such as merchant fees on UPI and the cost of keeping the network free, will shape whether that digital lead keeps widening.
