Economy

Use of cash gains as digital modes slump

Cash withdrawals from automated teller machines (ATMs) has further increased in February to ₹1.93 lakh crore from ₹1.52 lakh crore in January, data from the Reserve Bank of India (RBI) showed, and is on track to reach the pre-demonetisation levels.

Following the withdrawal of high value currency notes from November 9, 2016, withdrawals from ATMs almost halved in that month as compared with October and further dipped in December. At the same time, use of debit cards on point-of-sale terminals more than doubled to ₹58,031 crore in December from the October levels.

However, with the remonetisation process well underway, use of debit cards at point-of-sale terminals have also come down in February, while cash withdrawal is going up, RBI data shows.

“What we are seeing on the ground is that with the cash situation having eased up a bit, [and] I am not saying it has completely eased up, transaction volumes have once again come back,” said Navroze Dastur, MD, NCR India. Close to half of the country’s 2.2 lakh ATMs are from NCR.

“People are again going back to cash,” he said. “Withdrawals for cash have increased and we will see them getting back to more or less [the levels in the] pre demonetisation period.”

Total cash and currency circulation in the system was ₹13.32 lakh crore as on March 31, which is 76% of the ₹17.97 lakh crore that was in circulation before November 8.

Digital modes of payment such as prepaid payments instruments (including mobile wallets) and mobile banking, which also gained momentum post note ban as transaction values surged, also declined in January and further fell in February, RBI data showed.


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Printable version | Sep 22, 2021 5:44:23 AM | https://www.thehindu.com/business/Economy/use-of-cash-gains-as-digital-modes-slump/article17929512.ece

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