Major Fall In Currency In Circulation During Diwali Week: SBI Report

SBI Research has said in its report Ecowrap that innovation in technology has changed the Indian Payment System. This has been possible only because of the increase in digital transactions.

Across the country, digital transactions have become the power of the general public rather than cash because common people like digital transactions much than cash. The reason for this is that people no longer have to go to the bank for transactions, they can do transactions online.

SBI's research report has revealed that for the first time in 20 years, there has been a major fall in currency in circulation during the Diwali week. Innovations in technology have transformed the Indian payment system. Over the years the Indian cash lead economy has now turned into a smart-phone lead payment economy. Less currency in circulation is also tantamount to a reduction in the CRR for the banking system, as it leads to less utilisation of deposits and will positively impact monetary transmission.

The Indian economy is passing through a phase of structural change. The success of the digital journey was mainly due to the relentless effort by the government to formalise and digitise the economy. Moreover, interoperable payment systems like Unified Payment Interface (UPI), wallets and prepaid payment instruments (PPIs) have made it easier and cheaper for people to transfer money digitally.