&w=3840&q=100)
Notes in circulation rose to Rs 34.8 trn in 2024: RBI's monthly bulletin
The volume of Notes in Circulation (NiC) has increased in recent years, despite a decline in cash usage in India since the 1990s. This growth is partly attributed to precautionary cash holdings during the Covid-19 pandemic.
According to the Reserve Bank of India' s (RBI) monthly bulletin, NiC rose to around ~34.8 trillion in 2024 from around ~2.1 trillion in 2001. The views expressed in the bulletin are those of the authors and do not necessarily represent the RBI's official stance.
Over the past two decades, the demand for physical cash has evolved significantly. Factors such as the rapid expansion of bank branches and ATM networks, increased penetration of internet-enabled phones, and significant advancements in payment and settlement systems have contributed to a lower compound annual growth rate (CAGR) in NiC in the last decade. Between 2004 and 2024, in each of the two 10-year periods, the CAGR of NiC in value terms was higher than that in volume terms, indicating a shift towards higher denomination notes.
'In each of the two 10-year periods between 2004 and 2024, CAGR of NiC in value was higher than that in volume, indicating a shift towards higher denominations. It is worth noting that the growth rate in NiC (in value terms) in the 10-year period between 2014 and 2024 was significantly lower as compared to the previous two decades,' the report said.
While NiC growth outpaced GDP growth between 1994 and 2004, the gap narrowed considerably in the subsequent two decades.
Between 2005 and 2014, the number of ATMs per lakh adults increased dramatically, with a CAGR of slightly over 25 per cent. Evidence suggests that during normal periods (i.e., periods not affected by events like COVID-19), easier access to ATMs reduces households' cash holdings, as they are more comfortable maintaining lower balances. This reduces their need for precautionary cash holdings.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
38 minutes ago
- Time of India
Cheaper home and car loans: India Inc gets a booster and fire power to drive growth
Borrowing costs at India's two most rate-sensitive sectors - property and automobiles - are set to head South soon after the central bank Friday made its steepest rate cut since March 2020 and promised ample liquidity in the shape of the lowest cash reserve ratio (CRR) on record. The Nifty Realty index surged nearly 5%, even dwarfing gains for financial stocks, reflecting the likely impact of the big-bang policy moves on home purchases. Home, personal, and car loans tied to external benchmarks, such as the repo rate, will see an immediate downward reduction. However, loans tied to the marginal cost of funds-based lending rate (MCLR), like corporate exposures, will take longer to head lower. Policy action, Reserve Bank of India ( RBI ) Governor Sanjay Malhotra said, is geared toward boosting broader credit demand for which monetary support is a "necessary condition", although not sufficient. "We see this as an opportunity to step up credit deployment, especially towards productive sectors and retail demand, while continuing to support MSMEs, retail, agri, and other priority segments," said Ashok Chandra, MD & CEO of Punjab National Bank . On Friday, the RBI reduced the benchmark repo rate by 50 basis points to 5.5%, taking the total cut to 100 bps in the current rate easing cycle that began in February. Furthermore, the RBI also reduced the CRR or the funds lenders must park with the RBI, by a percentage point starting September, promising to add $30 billion of liquidity in phases and helping reduce borrowing costs. Before the cut, State Bank of India , the largest mortgage lender, was charging 8-8.65% interest on home loans . As per a Paisabazaar analysis, if the home loan rate falls to 7.5%, a loan of ?75 lakh with a tenure of 20 years would see EMI fall to ?60,419 a month. At 8% a borrower would pay ?62,733 as monthly interest payout. Hot Property Stocks such as Godrej Properties , Oberoi Realty , DLF and Prestige surged between 5% and 6.75% on unusually large volumes, overshadowing gains at large financiers that are expectedly the biggest gainers from the policy moves Friday. The Nifty Automobile index climbed 1.5%, with truckmaker Ashok Leyland leading the list of gainers at 3.6%. The RBI's decision is also expected to help improve housing affordability and prop up demand for residential properties across the country, especially in the mid-income and affordable housing segments, experts said. With home loan rates likely to ease following this rate reduction, realty developers are optimistic about a fresh wave of end-user activity. "The rate cut is expected to bring down home loan interest rates, improving affordability and widening access to homeownership. This could provide a meaningful push for first-time buyers and households looking to upgrade, especially in price-sensitive urban and suburban markets. We expect this move to translate into increased enquiries and faster decision-making in the coming months," said Deepak Goradia, chairman of Dosti Realty. Lower borrowing costs could also unlock fence-sitter demand in tier II and III cities, where salaried buyers are highly rate-sensitive.
New Indian Express
an hour ago
- New Indian Express
RBI rate cut brings optimism to Hyderabad realty market
HYDERABAD: The Reserve Bank of India's jumbo 50-basis-point cut in the policy repo rate to 5.5%, along with a 100-basis-point reduction in the Cash Reserve Ratio, has landed in Hyderabad at a time when developers have been struggling to balance brisk demand with rising construction costs. Announced during the RBI's Monetary Policy Committee meeting in Mumbai on Friday, the move is expected to reduce EMIs once banks pass on the entire half‑percentage‑point relief. Mortgage advisers estimate that a `1 crore, 20-year loan could become approximately `3,000 cheaper per month, enhancing the purchasing power of both first-time buyers and those eyeing upgrades. Sentiment on the ground is positive. CREDAI Hyderabad president V Rajasekhar Reddy described the cut as a welcome move that could nudge fence‑sitters. He noted that Hyderabad's real estate market, driven by end users, remains fundamentally strong. With the city entering 2025 carrying under six quarters of unsold inventory—despite a 21% rise in primary sales last year—Rajasekhar Reddy Allipuram, founder & CEO of PropGo Infra and Realty, believes the deeper-than-expected cut could reduce this overhang by prompting quicker purchases over the next two to three quarters. 'Yet the pace of relief will hinge on how quickly lenders re‑price home loans and whether input‑cost inflation stays in check,' he cautioned. Any lag on either front, he warned, could blunt what is otherwise the strongest monetary tailwind the city has felt since the pandemic slowdown. CREDAI Hyderabad's V Rajasekhar Reddy echoed the optimism. 'The unsold inventory reflects increased launches to meet anticipated demand, not stagnation,' he noted, adding that Hyderabad's affordability and robust infrastructure pipeline position it to clear inventory faster than other metros, and to drive new project launches, provided liquidity improves and policy support persists. He also stressed the importance of timely rate transmission by banks. 'Any delay dilutes the intent of such monetary interventions,' he said. PropGo Infra's Reddy expects public sector banks, which typically respond more quickly, to begin passing on the rate cut within the coming weeks. He warned that delays could dampen buyer interest, especially in price-sensitive segments like affordable and mid-income housing.
Mint
an hour ago
- Mint
Rate-sensitive sectors like banking, NBFCs, real estate and automobile to gain amid easing rates: Report
New Delhi [India], : Sectors such as banking, NBFCs, real estate, and automobiles are expected to be the key beneficiaries of the current easing interest rate environment, according to a report by Nexedge Research. The report mentioned that with borrowing costs on a downward trend, these rate-sensitive segments are likely to witness stronger credit flow, lower financing costs, and improved demand conditions. It said, "Banking, NBFCs, real estate, and automobiles are well positioned to benefit from lower borrowing costs." The report also noted that the Indian economy is entering a phase marked by benign inflation and ample liquidity, creating a sustained low-interest rate backdrop. This is already evident in the falling money market rates and a notable softening in the 10-year government bond yield. The report mentioned that the decline in yields has boosted bond prices and improved return prospects for fixed-income investors. It said, "Money market rates and bond yields are trending lower, with the 10-year G-sec yield already softening, boosting bond prices and supporting fixed-income returns." The report highlighted that inflation is currently hovering near the lower end of the Reserve Bank of India's target range of 2-6 per cent. With the RBI maintaining a neutral policy stance, the market is beginning to price in the possibility of further rate cuts. This combination of falling inflation and proactive monetary easing is seen as supportive for both equity and bond markets. The report suggested that these factors together are strengthening the medium-term macro outlook, offering a positive backdrop for investors and further momentum for India's economic growth. The RBI's Monetary Policy Committee on Friday cut the repo rate by 50 basis points to 5.50 per cent . This larger-than-expected cut marks the third consecutive reduction in 2025, totalling 100 bps of easing since February. Consequently, the Standing Deposit Facility rate stands adjusted at 5.25 per cent, and the Marginal Standing Facility rate and Bank Rate are set at 5.75 per cent. The RBI has also reduced CRR by 100 bps to augment durable liquidity in the banking system. This CRR cut will be implemented in phases beginning September 6, , and November 29, 2025, and is expected to release roughly ₹ 2.5 trillion of liquidity by November 2025, bolstering bank lending capacity. This article was generated from an automated news agency feed without modifications to text.
