Banks see `53,000-cr withdrawals in 2 weeks

Amidst Covid-19 fears, people are keeping more cash in hand to meet any eventuality. In the fortnight ended March 13, customers withdrew around Rs 53, 000 crore in cash from banks, which is a multi-month high.

During the fortnight, people withdrew Rs 52,885 crore and the cash with the public went up to Rs 23 lakh crore. The total cash held by public around the same time last year, or the fortnight ending March 31, 2019, was around Rs 20 lakh crore.

In the previous fortnight that ended on February 28, 2020, people were seen depositing more and the net deposits were at Rs 2,085 crore. The total currency with the public then stood at Rs 22 lakh crore.

Cash withdrawals were as low as Rs 3,411 crore in the fortnight ending January 31.

"It was expected. This is definitely due to the impact of coronavirus as people want to hold more cash in hand during emergencies. In the past seven to eight days we have seen increasing number of withdrawals through bank branches and ATMs.

Considering the crisis situation, banks also have not been refusing," said Asutosh Khajuria, executive director and chief financial officer, Federal Bank.

According to him, in the past few months, the withdrawals had been lesser as customers were making more digital transactions. But the pandemic has reversed the trend.

The trend is likely to continue till the virus concerns are eased. Further, the direct benefit transfer as part of the Rs 1.7 lakh crore package announced by the central government will see more cash in the hands of the public.

Even for essential goods like groceries and medicines, people are using more cash during the lock-down as the e-commerce deliveries have been distorted.

"Going ahead cash withdrawals are going to rise further," Khajuria added.