The Observation Engine

Cash remains a cornerstone of Indian transactions, especially in semi-urban and rural areas where ATM withdrawals outpace metro cities, according to a recent LinkedIn Economic Graph report. While UPI and digital payments dominate headlines, the data reveal a hybrid reality where physical currency persists for everyday needs. The Urban-Rural Divide in Cash Usage The report highlights stark geographic differences. Semi-urban and rural consumers rely more on ATMs for cash access, reflecting limited digital infrastructure and a preference for tangible money. In contrast, metros lean toward UPI for convenience, with urban digital payments surging 35% in FY25. This aligns with RBI's Cash Usage Indicator (CUI), showing cash accounting for 51.9%–59.9% of household spending in 2024, even as digital transactions hit 43.6%. Rural areas favor cash for its immediacy in informal economies, daily wages, and small vendor payments. Why Cash Endures Amid UPI Boom Several factors keep cash relevant: ...

India’s banks and lenders have gone digital, deploying AI-powered bots and virtual agents to track down loan defaulters, automate reminders, and dramatically improve debt recovery rates. This marks a major shift in how overdue loans are managed, impacting customers, lenders, and the entire financial ecosystem. What’s Changed? The Rise of AI Avatars Banks and NBFCs now use AI-generated avatars , often dressed smartly as lawyers, to make video calls or send personalized reminders to borrowers who have missed repayments. These bots interact with customers firmly but politely, nudging them to pay, without crossing lines sometimes breached by human agents. AI systems work around the clock, reaching more people much faster than humans. Where a traditional recovery agent managed about 250 cases/month, an AI agent can handle up to 5,000, at 40–60% lower costs. How Does AI Boost Recovery? Predictive Analytics: AI spots at-risk borrowers by analyzing payment, credit, and even b...

  The Indian rupee has slipped to a new record low of 88.33 against the US dollar as of September 2025, reflecting a mix of global and domestic pressures on the economy. What’s Driving the Fall? US Tariff Hike: The US recently increased tariffs on Indian goods by 25%, totaling almost 50% duties on several products. This has worsened India’s export competitiveness, especially in industries like textiles and engineering goods, and spooked foreign investors. Foreign Investment Outflows: In the last three trading days alone, foreign investors withdrew about $2.4 billion from Indian equity markets amid uncertainty, further straining demand for the rupee. Higher Import Costs: A weaker rupee makes crude oil, gold, electronics, and other major imports costlier, which can lead to higher inflation and put more pressure on India’s trade deficit. Market Speculation & Hedging: Importers and traders are holding more dollars to hedge against further falls, pushing the rupee...