Cash Surge: SBI Reveals Why Currency in Circulation Hit Record ₹40 Lakh Crore

• India's Currency in Circulation (CIC) reached a record ₹40 lakh crore by January 31, 2026, an 11.1% increase year-on-year.
• SBI Research attributes the rise partly to policy signals, specifically GST notices issued on UPI-linked transactions to small businesses.
• Districts in Karnataka, West Bengal, and Kerala saw increased ATM withdrawals after GST notices, indicating a temporary shift to cash.
• Economic factors like low interest rates and rising gold/silver prices also contributed to increased cash holdings.
• Despite the cash surge, digital payments, particularly UPI, continue to grow rapidly, with UPI transactions reaching ₹28.3 lakh crore monthly.