The usage of cash is increasing and reaching the level of pre-COVID. In Aug, the cash usage was only ten percentage points lower than February. In March, when the strict national lockdown was imposed to contain the pandemic, the usage of cash dropped to as much as 38 per cent of what it was in February, according to data from CMS Info-Systems. This company manages cash circulation at 115,000 ATMs and retail outlets across India. The figure improved to 75 per cent in June and July compared to February.

“The data is compiled based on cash replenishment at ATMs and different retail outlets. People, typically, withdraw cash for their immediate needs. The data indicates that demand and consumption could be coming back,” said Anush Raghavan, senior vice-president and head of cash business unit, CMS.

In August, cash usage in rural areas was three percentage points higher than February, and in semi-metros, it was just seven percentage points lower. In metros, cash usage is yet to pick up it was 59 per cent compared to the February level.

Raghavan said the top six metros saw a more stringent lockdown compared to the smaller cities and rural areas. “They are still slowly opening up. Cash use in rural areas is also higher because of better agriculture production and government cash transfers. Also, the impact of the virus is not as severe in rural areas compared to metros,” he said. “Cash use in metros could be lower as residents; they are also more comfortable using digital modes of payments.”