How much? Coins held by the public in India?

WHAT IS THE MEANING OF CURRENCY HELD WITH PUBLIC?

As per the RBI definition, currency with 

public is arrived at after Deducting cash with banks from total currency in circulation.

CURRENCY IN CIRCULATION

Currency in circulation refers to cash or currency within a country that is physically used to conduct transactions between consumers and businesses.

WHAT’S HAPPENED?

Currency with public hit a new high of Rs 26 lakh crore for the first time as resident Indians continued to increase their cash holding amidst the ongoing Covid-19 pandemic,Though the pace of increase has declined over the last couple of months. According to data released by the Reserve Bank of India (RBI), in the fortnight ended September 11, The currency with public increased by Rs 17,891 crore to hit a new high of Rs 26 lakh crore. Since the fortnight ended February 28, 2020, when the currency in circulation was Rs 22.55 lakh crore, It has risen by Rs 3.45 lakh crore to hit Rs 26 lakh crore on September 11, 2020, as per the RBI data.

DEMONETISATION

During demonetisation in 2016, the government said that it wanted to make India a ‘less cash economy’. The cash with public has risen nearly 45% from what it was before demonetisation.While currency with public stood at Rs 17.97 lakh crore as on November 4, 2016, Soon after demonetisation, it had declined to Rs 7.8 lakh crore in January 2017.

SLOWER GROWTH IN CASH HELD BY PUBLIC

It is important to note that the sudden rush for cash by the public that started alongside the Covid-19 pandemic and in anticipation of lockdown announcement in March Has slowed over the last couple of months as the lockdown restrictions eased and e-commerce has become fully operational.

REASON FOR THE RISE

“During lockdown, since people were relying on neighbourhood kirana stores and wanted to avoid exposure to virus, They withdrew big amounts of cash at one go to meet their monthly needs and that led to a rise in currency with the public,” said DK Pant, chief economist at India Ratings. Cash withdrawals from ATMs, which declined to Rs 1,27,660 crore in April increased to Rs 2,34,119 crore in July, According to the latest RBI data. Also the RBI has pumped around Rs 10 lakh crore 

liquidity into the financial system in order to bail out the economy from the vagaries of Covid-19. This has pushed up the retail inflation to above 6% level, which is higher than the RBI’s target of 4%.

DIGITAL PAYMENT

Funds routed through the digital payment system also increased from Rs 82.46 lakh crore in April to Rs 111.18 lakh crore till July 31, 2020.