The coronavirus outbreak has led Indians to hoard groceries, essentials—and cash.
The “currency with public” in the country reached a record high of Rs23.41 lakh crore ($310 billion) for financial year 2020, according to central bank data examined by the Indian Express newspaper today (April 13). This is a 14% increase from the previous financial year.
In March alone, cash in the hands of Indians jumped by Rs86,000 crore. The cash withdrawn from banks and ATMs in the month was four times the monthly average recorded last financial year, the Indian Express reported.
The correlation between the cash hoarding and the Covid-19 pandemic, which has infected 9,152 and killed 308 in India so far, was evident in the last two weeks of March. Between March 13 and March 27 alone, currency with public rose by Rs33,359 crore. Prime minister Narendra Modi had announced a nationwide lockdown to contain the spread of coronavirus on March 24.
The three-week lockdown, which is officially due to end tomorrow (April 14), left Indians worried about accessing essential services as well as supplies for their homes.
The scramble to withdraw cash in March stands in sharp contrast to November 2016, when Modi’s demonetisation move rendered high-value currency notes invalid overnight. At the time, strict curbs on cash withdrawals had led to currency with public dwindling to Rs7.8 lakh crore.
Cash in circulation, which is the total of the cash with banks and the currency with public, was also down to Rs8.9 lakh crore immediately post demonetisation. However, since then, both the figures have been consistently rising.
The panic withdrawal last month happened despite uninterrupted service from banks and ATM machines, and the Reserve Bank of India’s campaign urging Indians to adopt digital payments.