India is using digital payments more than ever before. UPI transactions have crossed 200 billion. More people are paying through QR codes, mobile apps, and online payment platforms. But there is a surprise. People are also using more cash.
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According to the Reserve Bank of India (RBI), the amount of cash in circulation grew by 11.4% in FY26. This is much higher than the growth seen a year earlier. At the same time, digital payments also increased strongly. Retail digital payments grew by nearly 27%, while UPI transactions rose by around 30%.
This shows that Indians are not choosing between cash and digital payments. Instead, many people are using both.
The RBI said several reasons are driving higher cash use. State governments made welfare payments. Farmers received compensation for crop losses. Direct benefit transfers from the government also increased. Tax cuts and higher consumer spending added to the demand for cash.
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Another reason is gold. Gold and silver prices rose sharply during the year. Many households continued to spend money on precious metals, which may have increased cash withdrawals. Even though UPI is now the most popular payment method in India, cash remains important for many people. It is still widely used for savings, local purchases, and government-related payments.
The trend suggests that India’s payment system is becoming a mix of digital and cash transactions. UPI is growing rapidly, but cash is not disappearing anytime soon.
Indrani Priyadarshini is a journalist and editorial professional specialising in technology, artificial intelligence, smart cities, green energy, and digital transformation. With over four years of experience in tech journalism and digital media, she is known for turning complex industry developments into clear, engaging, and insightful stories. Her expertise spans reporting, editorial strategy, digital publishing workflows, and in-depth coverage of emerging technologies shaping the future. She has also conducted high-profile interviews and podcasts with industry leaders, bringing sharp analysis and accessible storytelling to a wide audience.
