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EFFECT OF COVID-19: CHANGE IN CASH HABIT

The COVID-19 pandemic has brought about a behavioral change in the usage of cash. The ferocity of the second wave of the coronavirus pandemic has scared people and, in view of lockdown and social distancing norms, has seen subsequent changes in the cash usage habits of the people.

  1. Due to the risk of catching the infection, people avoiding to visit the bank for depositing/withdrawing the money.
  2. People withdraw larger amounts from ATMs and avoid frequent visits to Banks and ATM’s
  3. The average ticket size of withdrawals at any given time has gone up by almost 20 percent, as people withdraw in larger quantities.
  4. Now people prefer to hoard cash for pre-empting medical or any other form of emergencies, which ultimately is not consumed as much.
  5. The average ticket size of withdrawals, which earlier ranged between 2,000-3,000 now has invariably gone up by 20 percent to Rs 3,000-4,000 across both rural and urban India.
  6. Now, consumers find digital payments are more convenient and easier. Earlier, a consumer who preferred cash as a primary medium for certain types of transactions now preferred to make digital payments for his day-to-day expenses.
  7. Daily average transactions on IMPS have now gone up to Rs 9,000 which was earlier in the range of around Rs 6,000-7,000.
  8. Further, hospitals have recently been allowed to accept cash even beyond 2 lakhs on receipt of PAN and Aadhaar cards.

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