HomeBankingCurrency in circulation set to rise during festive season, bolstered by GST cuts and Bihar election

MC EXCLUSIVE Currency in circulation set to rise during festive season, bolstered by GST cuts and Bihar election

Traditionally, the demand for currency in hand increases during the festival season between September and November, when India celebrates Ganesh Chaturthi, Navratri, Dussehra, and Diwali. Additionally, election-related spending also pushes up cash withdrawals in states heading to polls.

September 09, 2025 / 13:35 IST
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Currency in Circulation
Currency in Circulation

The currency in circulation (CIC) is expected to rise significantly in the coming months on back of festive season transactions, Bihar state election in November and the recent reduction in Goods and Services Tax (GST), treasury heads of private and state-owned banks have said.

According to the Reserve Bank of India (RBI) data, the CIC has already risen by 2.1 percent so far in the current financial year.

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Despite India’s push towards a digital economy, cash remains a dominant mode of transaction during periods such as the festive season, particularly in rural and semi-urban regions, where the digital penetration remains uneven.

“The onset of the festive season traditionally results in a pick-up in currency in circulation, led by higher consumer spending, cash withdrawals for retail purchases and increased activity in informal segments of the economy,” V Ramachandra Reddy, Deputy General Manager and Head of Treasury at The Karur Vysya Bank.