ATM cash withdrawals increased by 235 percent to Rs 2.85 lakh crore

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- Withdrawals made by customers from ATMs show that cash circulation in India has increased even after demonetisation

- Karnataka, Chhattisgarh and Andhra have more cash withdrawals than the country: Five big states like Gujarat, Maharashtra account for 43 percent.

AHMEDABAD: Days after reports that the growing prevalence of wallets, UPI and digital technology in India is driving digital payments over cash at the time of purchase, a new study proves that cash is king for the people of India. Between November 2016 and March 2023, cash withdrawals from ATMs have increased by 235 percent since demonetisation in November 2016. In December 2016, an amount of Rs.84,934 crore was withdrawn from ATMs per month, which increased to Rs.2.85 lakh crore in March 2023.

According to the India Cash Vibrancy report by CMS Info System, a company that provides cash exchange services at ATMs, cash withdrawals in March 2023 are 121 percent higher than April 2020 and 41 percent higher than May 2021. The report further notes that after demonetisation, the currency of the country's economy has more than doubled in cash. In October 2016, the currency of cash was Rs. 17.78 lakh crore which decreased to 9.43 lakh crore in December which has increased to Rs.33.8 lakh crore in March 2023.

While the Reserve Bank of India has resumed the process of withdrawing Rs.2,000 notes from circulation on May 23, it is expected that there will be no impact on the economy as the volume of these currency notes is low in the system, this report on the amount of cash in the country shows that for Indians Cash is a major source of financial transactions.

Cash plays an increasing role in the Indian economy. It is necessary to bring every section of the society under the ambit of financial facilities. The amount of cash refills at ATMs is increasing by 10.1 percent on an average.

While it is our company's experience that the volume of cash collection at the collection points of e-commerce companies has increased by 1.3 times in the financial year 2022-23,' said Anush Raghavan, Head of Cash Management, CMS Info.

There are different companies providing services such as cashing in ATMs of banks, which are continuously working, of which CMS Info has a share of 46 percent. According to the report released by the company on the state of cash in the country, Karnataka ranks first in terms of the average amount of cash returned to an ATM during the year. ATMs under CMS Info in Karnataka averaged Rs.1.73 crore in 2022-23 as against Rs.1.46 crore in 2021-22. This is followed by Chhattisgarh and Andhra Pradesh.

Maharashtra, Gujarat, Tamil Nadu, Karnataka and Uttar Pradesh together have the maximum share in the country's total economy or GDP. Five states also have the highest amount of cash. These five states accounted for 43.1 percent of cash refunds in 2022-23, according to the CMS report. An average cash withdrawal of Rs.1.40 crore was made at each ATM in the state of Gujarat.

Cash is directly related to the economy

According to the CMAC Info report, there is a direct correlation between the economic condition of the country - such as the rate of inflation or activity in the economy - and cash. In the last six months of the year 2022, when inflation was at a high level, due to heavy withdrawals from ATMs, there was also an increase in the amount of paying notes. Similarly, the graph of Purchase Manager Index and Cash in Currency Index of Savas Sector also shows that when the Purchase Manager Index increases, the amount of cash also increases.

Average in ATM

 

how much cash

 

State

Rs. Crore

Maharashtra

1.30

Gujarat

1.40

Tamil Nadu

1.50

Karnataka

1.73

Uttar Pradesh

1.30


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