The currency in circulation (CIC) decreased during Diwali week for the second time in 20 years as people switched to using digital payment methods to make their seasonal shopping.
According to RBI data, the amount of money in circulation decreased by £593.4 million to £336 billion in the week ending November 17. The Diwali celebration took place this year from November 10 to 14.
There has been a decrease of £2.27 billion in the amount of currency in circulation this financial year. Although bankers claim that 97% of the £200 million in banknotes that were taken out were returned in October, a portion of the reduction can be attributed to this process.
According to Soumya Kanti Ghosh, group chief economic adviser, SBI, the cash decline reflects the power of digital transactions. “With the increased acceptance of digital payments in the country, the over-reliance on cash is slowly fading. In October 2023, UPI increased (month-on month) by 853 million transactions of £13.66 billion in value terms,” he said. An Ecowrap research report by SBI analysed the movement of currency in circulation during Diwali week for the previous two decades. In every year, the CIC has gone up, barring 2009, following the global financial crisis. In 2021, Diwali saw CIC increase £4.4 billion during the festival week. A year earlier, during the pandemic, it rose by £4.38 billion.