Corona Impact: The Kovid-19 pandemic has brought about a practical change among people regarding the use of cash. The second wave of corona in the country created panic among the people, as a result, people started withdrawing more cash from ATMs, so that they do not have to go around again and again.
New Delhi: Corona Impact: The Kovid-19 pandemic has brought about a behavioral change among people regarding the use of cash. The second wave of corona in the country created panic among the people, as a result, people started withdrawing more cash from ATMs, so that they do not have to go around again and again. Experts found that the cash withdrawn was kept only for emergency, while the payments were made through UPI or other means.
Cash withdrawn from ATM, but not spent
Regarding this change in behavior regarding the use of cash, Sarvatra Technologies founder and MD Mandar Agashe says that due to the restrictions of lockdown and social distancing, people were not going to banks and ATMs frequently. At any point in time, the size of withdrawals increased by more than 20%, as people began to collect huge amounts of cash in view of a medical emergency or any other kind of emergency, in the end that money was not even spent .
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These changes came in the people
According to Agashe, city or rural areas, where earlier people used to withdraw cash between Rs 2000-3000, now it has increased by 20% to between Rs 3000-4000. UPI was used to pay all the small expenses, which is an average of Rs 1000. Due to this change in behavior, the average daily transaction through IMPS has reached Rs 9000, which used to be between Rs 6000-7000 earlier. Agashe says that- The second wave of corona has had a great impact on the management of cash, there has been a lot of change in the behavior pattern of the people, which will have an impact on digital transactions in the long run.
Cash withdrawal increased in an atmosphere of fear
According to a data of the Reserve Bank – as on March 26, the cash circulation in the system was Rs 2,858,640 crore, which increased to Rs 2,939,997 crore by May 7, 2021, meaning people took out more cash. Madan Sabnavis, Chief Economist, Care Ratings, says that in such an uncertain environment, people’s priority has been to collect cash. Sabnavis also believes that keeping cash in stock was a precautionary measure, as cash may be needed for medical or other sudden expenses.
people were apprehensive of the lockdown
Anand Kumar Bajaj, Founder, PayNearby says that there was panic among people, due to which they started withdrawing cash. He feared that strict lockdown restrictions might be imposed to stop the epidemic. The government transferred a huge amount through direct benefit transfer to the Jan Dhan accounts of lakhs of migrant laborers and the poor. According to Bajaj, our Aadhaar-enabled Payment System (AePS) withdrawals stood at Rs 10,000 crore in the fourth quarter of FY21, as against Rs 7,650 crore in the same quarter last year. Therefore, withdrawal from DBT can also be considered as the reason for the increase in cash circulation.
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