Despite rapid growth in digital payments, RBI’s survey found that households and small retailers continue to prefer cash, while currency in circulation rose strongly in FY26
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In 2025-26, of the total Fake Indian Currency Notes (FICNs) detected in the banking sector, 2.4 per cent were detected at the RBI
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Despite the surge in digital payments in India, the preference for cash usage remained strong among households and small retailers, a survey conducted by the Reserve Bank of India (RBI) showed.
According to the RBI’s annual report for 2025-26, the central bank conducted a survey on households’ payment behaviour among individuals and small retail sellers to understand usage and preference for cash and digital modes of payment.
“The survey results indicated continued strong preference for usage of cash,” the annual report said.
This is also reflected in the robust growth of banknotes in circulation in FY26. The value of banknotes in circulation increased by 11.9 per cent to ₹41.23 trillion by the end of March 2026. In volume terms, the increase was 10.5 per cent.
In value terms, the ₹500 note constituted 85.5 per cent of the total, marginally down from 86 per cent last year. The smaller denomination notes, ₹10 and ₹20, constituted 0.7 per cent each.
“In volume terms, the ₹500 denomination constituted the highest share of the total banknotes in circulation, followed by ₹10 denomination banknotes,” the report said.
The expenditure incurred on security printing during 2025-26 was ₹4,875.2 crore, as against ₹6,372.8 crore during the previous year, due to a reduced indent of banknotes during 2025-26. The indent was for 281,000 lakh (28.1 billion) pieces in FY26, compared to 303,000 lakh (30.3 billion) pieces in the previous year.
Total coins in circulation rose to ₹40,814 crore by end-March 2026, from ₹36,628 crore in the previous year. The proportion of the ₹5 coin continued to be the highest at 28.4 per cent (29.5 per cent last year), followed by the ₹10 coin at 24.9 per cent (22.9 per cent last year).
The central bank said that maintaining self-sufficiency in banknote production through indigenisation across the spectrum, enhancing the lifespan, security and integrity of banknote design, and improving the quality of banknotes in circulation shall remain priority areas. It also plans to launch a phased rollout of banknotes with upgraded security features from the middle of 2026.
In 2025-26, of the total Fake Indian Currency Notes (FICNs) detected in the banking sector, 2.4 per cent were detected at the RBI.
The number of counterfeit notes detected rose 5.7 per cent year-on-year (YoY) to 229,746 pieces. Across denominations, counterfeit notes in ₹10, ₹50, ₹100, ₹200 and ₹2,000 declined during 2025-26, while those in ₹20 and ₹500 denominations increased by 47.4 per cent and 20.5 per cent, respectively, compared with FY25.
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