, Columnist
India's King Cash Must Abdicate
Currency in circulation is almost 10 times what it was 17 years ago. Smartphones will change that.
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Why do Indians love assets that yield nothing? Three years ago, it was their passion for hoarding gold that brought the country to the brink of a full-blown financial crisis. Now, it's their lust for cash that's hobbling the banking industry.
In its annual report released late Monday, the central bank blamed an "unusually high and protracted" demand for notes and coins for slowing down the velocity of money, or the pace at which commercial lenders make fresh loans, which in turn become new deposits for the banking system and lead to further credit expansion.