India cash demand jumps to record 42.3 trillion as rural spending drains bank liquidity

Banks may face a liquidity squeeze in coming weeks

India’s currency in circulation hit a record ₹42.3 trillion in April after a sharp early-month jump of over ₹610 billion. Economists link the rise to strong rural cash demand, GST-related relief, and election spending, alongside inflation pressures. If the surge continues, it could tighten banking liquidity and push the RBI to recalibrate how it manages surplus funds.