CASH USE BACK IN VOGUE DESPITE EPAYMENT PUSH

NEWDELHI: Cash transactions are back in vogue despite the government’s push for a less-cash economy post-demonetisation, Reserve Bank of India (RBI) data on ATM cash withdrawals indicate.

Withdrawals from ATMs in March this year stood at ~2,259 billion — 0.6% more than what people withdrew in the same month last year. This rate of growth is much lower than that in the corresponding period in the previous year—an increase of 11.4% for March 2016 as compared to March 2015.

But this could be attributed to many ATMs being reported either dysfunctional or short of cash even four months after Prime Minister Narendra Modi’s November 8 announcement to recall the old ~500 and ~1,000 notes. Besides, it was only on March 13 that the RBI lifted all cash withdrawal limits.

“March trends show that people are getting back to their old habit of using cash and the withdrawals have touched the same level despite restrictions and inadequate cash supply,” economist Nirupama Soundararajan of Pahle India Foundation told HT. In December 2016, when there were many restrictions in place, only ~849 billion was withdrawn.

When contacted, minister of state for finance, SS Gangwar refused to comment on the issue. Other top officials of the ministry, too, did not respond.

“The country was not fully prepared for moving towards digitisation through disruption and now data seem to suggest that people may be getting back to hoarding cash for emergency situations, the same way as during the pre-demonetisation period,” Ashvin Parekh, managing partner, APA Services, said.