Cash in circulation rises by over Rs1 trillion in Q3 FY2025-26 as Pakistan balances growing digital adoption with continued reliance on physical currency
Currency in circulation across Pakistan surged by more than Rs1 trillion during the third quarter of FY2025-26, reaching a record Rs11.93 trillion by the end of March 2026, despite the country’s rapidly expanding digital payments ecosystem, according to the latest Payment Systems Review released by the State Bank of Pakistan (SBP).
The report showed that currency in circulation increased by Rs1.056 trillion during the January–March 2026 quarter, rising from Rs10.87 trillion at the end of December 2025 to Rs11.93 trillion as of March 31, 2026. The sharp increase underscores the continued preference for cash transactions among consumers and businesses, even as digital financial services gain momentum across the country.
The findings highlight the coexistence of two parallel trends in Pakistan’s financial landscape: accelerating adoption of digital payments and sustained dependence on physical cash.
Alongside the rise in currency circulation, the SBP reported continued expansion in the country’s banking and payment infrastructure. The number of scheduled banks, microfinance banks and digital banks increased from 43 to 44 during the quarter, while the number of payment system operators (PSOs), payment service providers (PSPs), electronic money institutions (EMIs) and branchless banking service providers remained unchanged.
Pakistan’s banking network also expanded modestly. The number of bank and microfinance bank branches rose to 20,232 from 20,143 three months earlier, while branchless banking agents increased to 819,397 from 808,871, extending access to financial services across the country.
The ATM network continued to grow, with the number of automated teller machines increasing from 20,976 to 21,377. Cash deposit machines (CDMs/CCDMs) also rose to 1,752 from 1,638 during the same period.
Merchant acceptance infrastructure recorded notable growth as businesses increasingly embraced digital payment solutions. The number of point-of-sale (PoS) terminals climbed by more than 15,500 units to 247,836, while PoS-enabled merchants increased to 217,042 from 189,919.
QR code-based payments witnessed one of the strongest expansions during the quarter. The number of QR-enabled merchants surged from 1.94 million to 2.51 million, reflecting the growing acceptance of low-cost digital payment options among retailers and service providers.
The report also highlighted steady growth in digital banking users. Branchless banking mobile application users increased from 92.2 million to 95.8 million, while mobile banking users rose from 27.2 million to 28.9 million.
Similarly, electronic money institution (EMI) wallet users expanded from 6.8 million to 7.3 million, and internet banking users increased from 15.7 million to 16.2 million. Users of call centre and interactive voice response (IVR) banking services also edged higher to 45.4 million from 44.9 million.
Meanwhile, the number of payment cards in circulation climbed from 64.1 million to 68.3 million, indicating wider access to electronic payment instruments and continued growth in digital financial inclusion.
Despite these encouraging developments, the substantial increase in currency in circulation suggests that cash remains deeply embedded in Pakistan’s economy. Financial analysts note that while digital payments are expanding rapidly, cash continues to dominate everyday transactions, particularly in the informal sector and rural areas.
They believe that sustained investment in digital infrastructure, greater merchant acceptance, improved financial literacy and stronger incentives for electronic payments will be essential to reduce reliance on cash and accelerate Pakistan’s transition towards a more digitally driven and inclusive financial system.
