Despite digital push, cash transactions are back in vogue

transactions are back in vogue despite the NDA government’s push for a lesscash economy post-demonetization, Reserve Bank of India (RBI) data on cash withdrawals from ATM vending machines indicate.

Withdrawal from ATM vending machines in March this year stood at ₹2,259 billion—0.6% more than what people withdrew in March 2016. This month-onmonth rate of growth is less than that in the corresponding period in the previous year—11.4 % increase 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 ₹500 and 1000 notes. Besides, it was only on March 13 that the RBI lifted all ATM 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 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 In December 2016, when there were many restrictions in place, only ₹ 849 billion was withdrawn.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 digitization through disruption and now data seems 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.

As a result of demonetization, ₹15.44 lakh crore was sucked out

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