'Pandemic paradox': Cash was king in 2020 as digital transactions increased

Experts cite hoarding as reason for 22% spike in currency in circulation

At a time when transactions through unified payments system (UPI) crossed Rs 4 trillion, currency in circulation (CIC), which is all the money that has been issued by the Reserve Bank of India (RBI) minus those removed from the system, has risen 22 per cent for the entire calendar 2020.  

When compared with 11.8 per cent growth in calendar 2019, and considering that the nation was on a complete or partial lockdown for the better part of the year, the CIC growth looks surprisingly high.  

But experts say this phenomenon can be explained when the economic concept of ‘precautionary holding’