Every Rupee Digital

The plan

1. All cash ends within 1 year, with no value lost. From day 1 the presses stop printing notes and the mints stop minting coins. ₹500 and ₹200 notes stop being legal tender at month 3. All other notes and coins stop being legal tender at month 12. Parliament amends RBI Act section 26 and the Coinage Act, 2011 in the first 30 days to set these dates.
2. Deposit any amount, anywhere. Until month 12, any note or coin can be deposited into the holder's own account at any bank branch, post office or banking agent, in any amount, credited instantly. Deposits above ₹2.5 lakh are matched to the Chapter 1 amnesty declarations and the Chapter 13 asset register.
3. Every person can pay digitally, with or without a phone.
   • Smartphone: UPI, with face or fingerprint sign-in on the user's own device and a PIN as fallback. Anyone who needs a phone gets a low-cost one (Chapter 4).
   • Feature phone: UPI 123PAY, using voice calls and missed calls.
   • No phone: Aadhaar Pay by fingerprint or face at any shop or agent, and an NFC tap card linked to the person's account.
   • No network or no power: UPI Lite and offline e-rupee wallets hold stored value on the phone or tap card, pay device to device, and settle when the network returns.
4. Transitional rules, only until month 12. Any single payment above ₹10,000 must be digital: the existing cash-receipt limit in the Income-tax Act (₹2 lakh today) is lowered to ₹10,000, with the same penalty of 100% of the amount, paid by the receiver. A 1% surcharge applies to cash withdrawals above ₹50,000 a month per person (Chapter 1). Both lapse when cash ends.
5. An account from birth. Registering a birth opens a zero-balance account in the child's name, run by a parent or guardian until age 10. RBI already lets children aged 10 and over run their own accounts (since July 2025).
6. A UPI wallet for every visitor. Every foreigner arriving at an airport, seaport or land border gets a UPI wallet at immigration, scaling up NPCI's existing UPI One World prepaid wallet. It is linked to the passport and visa, loaded from the visitor's own card or account or by converting foreign currency at the border, and works everywhere in India. On exit, any unspent balance is refunded. A visitor without a smartphone gets a loaded tap card.
7. No cash substitutes. Settling a payment in gold, foreign notes or any token outside the rupee rails carries the same 100% penalty on the receiver. Foreign notes may be held only by authorised dealers, by travellers within existing FEMA limits, and by visitors. Hallmarked gold carries its unique ID, so a sale shows on the Chapter 13 asset register.

Cost and return

One-time costs (estimate):

• Printing saving: printing notes cost ₹6,373 crore in FY25. That cost ends every year from day 1.
• Who pays: the government buys devices and tap cards once, at a fixed published price per certified device from any maker that passes the open specification (How the government buys).
• Activation helpers: up to 1 lakh bank correspondents and local agents activate dormant accounts in the first year, paid per verified active account under the Aadhaar playbook (estimate: ₹50 per account × 13 crore dormant accounts ≈ ₹650 crore).
• Deposits for lending: about ₹40 lakh crore of cash moves into bank accounts. If a quarter stays as deposits, that is about ₹10 lakh crore of new lendable money (estimate), as far as RBI's monetary stance allows.
• Cash logistics end: ATMs (2,51,057 in FY25), cash vans and vaults are retired, or converted to deposit-and-card kiosks for the month-12 window.
• RBI's income from cash (estimate): notes are a free loan to RBI. If all ₹40 lakh crore went to RBI's interest-paying deposit window (the standing deposit facility, at 5.25% after the October 2026 rate rise), RBI would pay about ₹2.1 lakh crore a year. The plan avoids this by absorbing the inflow first through offline e-rupee balances (which pay no interest), then a temporary rise in the cash reserve ratio (each 1 point on about ₹279 lakh crore of bank deposits, the October 2026 level, absorbs about ₹2.8 lakh crore at zero interest), and only last through the deposit window.
• Revenue: every rupee that moves through a bank is visible to the Chapter 1 bank transaction tax. The transition surcharge exists to speed the move, not to raise money.

Timeline

First 30 days:

• Day 1: printing and minting stop.
• Parliament amends RBI Act section 26 and the Coinage Act, 2011 to end legal tender on the dates above, and lowers the cash-receipt limit to ₹10,000 and sets the 1% transition surcharge.
• Deposit windows open at every bank branch, post office and agent.
• Birth-to-account is switched on, and re-KYC and activation begin for about 13 crore dormant Jan Dhan accounts.
• UPI One World wallets are issued at every international airport.

Within 1 year:

• Month 3: ₹500 and ₹200 notes end.
• Months 3 to 9: tap cards issued to everyone without a phone; every merchant accepts UPI and tap cards; offline wallets live on every bank app; visitor wallets at every seaport and land border.
• Month 9: the Chapter 4 mobile coverage, phones and tap cards are in place in every district. Any district that fails its live-signal test gets satellite terminals and tap cards first, so every district has at least 3 months of working digital payments before its notes end.
• Month 12: all notes and coins end; the deposit window closes; the ₹10,000 rule and the surcharge lapse.

Outcomes after year 1:

• The cash reserve ratio steps back down by 0.5 points a quarter from month 12, as RBI replaces it with longer-term bond operations.

Guardrails

• Uptime: UPI and every bank keep 99.9% monthly uptime. Each 0.1 point below costs the bank ₹1 crore, paid into the fraud-refund pool.
• Offline payments: every wallet and tap card can make offline payments of up to ₹2,000 each and hold up to ₹5,000, with no network or power at the shop. RBI tests this monthly in 100 random no-signal locations; a bank failing more than 2% of tests pays ₹10 lakh per failed test.
• Disasters and grid failure: in any declared disaster or grid failure over 4 hours, offline limits double automatically in the area, and banks reach it with mobile Aadhaar Pay agents within 24 hours.
• Small payments free: zero merchant fee on all UPI, Aadhaar Pay and tap-card payments up to ₹2,000.
• Fraud and refunds: a disputed payment is held within 24 hours while it is checked; fraud reported within 3 days is refunded within 10 working days. A new payee is capped at ₹10,000 a day unless raised by biometric sign-in. Mule accounts are frozen within 2 hours of a police-portal flag.
• Frozen accounts: only the disputed amount is held. A lifeline of ₹10,000 a month stays spendable from money that was in the account before the disputed credit, unless a court orders otherwise. A freeze beyond 7 days needs a magistrate's order. A wrongful freeze pays the holder ₹1,000 a day, paid by the agency that asked for it.
• Deposit window: every bank, post office and agent accepts notes and coins until month 12. A refusal costs the branch ₹1 lakh per case.
• Child accounts: withdrawals need the biometric sign-in of both parents or the guardian, and transfers out are capped at ₹5,000 a month until age 10.
• Visitor wallets: KYC by passport and visa scan at entry; a balance cap of ₹5 lakh per visitor; conversion at the RBI reference rate plus at most a 1% spread; refund of any unspent balance within 7 days of exit. Loading and refunds are own-account transfers, exempt from the BTT (Chapter 1).
• RBI surplus: the fall in RBI's surplus paid to the government stays under ₹50,000 crore a year, published quarterly by RBI.
• Privacy: no agency sees anyone's transactions without a court order, under the DPDP Act, 2023 and the court-order log (Chapter 4).
• One rule for all: every rule here applies to every person and every business, with no exemption for any group, sector or region.

Limits to know

At any given moment a few people will have a lost card, a dead phone or a failed fingerprint; Aadhaar Pay by face at any agent, instant card replacement at any post office and mobile agents in disasters keep that wait short, but it cannot be zero. Visitor wallets rely on foreign banks and card networks accepting top-ups and refunds, which India cannot force, so a tap card loaded with converted currency at the border is the fallback.

Sources: SBI Research, currency in circulation, Feb 2026 · RBI FY25 currency: ₹500 at 86%, e-rupee up 334% (Business Standard) · Printing cost ₹6,372.8 crore (Business Standard) · UPI October 2026 (Entrepreneur) · UPI ₹314 lakh crore in FY26 (The Week) · Jan Dhan 56.04 crore, 23% inoperative (Millennium Post) · Cyber fraud ₹22,845 crore (Angel One) · 99.3% of demonetised notes returned (The Quint) · ATMs FY25 (DT Next) · RBI lets minors over 10 run accounts (Business Standard) · NPCI biometric UPI (Mobile ID World) · Cash transaction limits (Business Standard) · UPI 123PAY (Razorpay) · Sveriges Riksbank, Payments Report 2026 (press slides) · RBI raises repo to 5.5%, deposit facility 5.25% (Oneindia) · RBI, scheduled banks' statement of position (deposits, 15 October 2026) · 98.47% of ₹2,000 notes returned (IANS) · RBI, Framework for offline digital payments (2022) · RBI press releases on withdrawal of the ₹2,000 note (2023) · Vivek Narayan Sharma v. Union of India (2023)