Currency holding by the public is said to have witnessed a record rise while many states in the country are embracing lockdowns to prevent the COVID situation from worsening.
An RBI data showed that in the fortnight ended April 23 the cash with public increased by Rs 15,919 crore to count Rs 28.03 lakh crore, which is the first time ever reported spurt. While the previous fortnight ended April 9, cash with the public had risen by Rs 30,191 crore. As much as Rs 96,776 crore cash has been flown into the hands of the public since February 1.
A report published in The Indian Express attributes more cash with public phenomena to an uncertain environment condition when people tend to accumulate cash on anticipation.
The increasing number of COVID cases and the government intervention to tame the pandemic might have created a sense of insecurity in people, who in turn withdrew money from banks to keep it with them in a view to meet emergency amid more COVID stringent measures.
The flow of cash into the public hand is expected to increase further in coming weeks, the IE report said citing some banking experts. The banking experts are of the opinion that the worsening COVID situation demands a complete nationwide lockdown, creating a fear in public that the money could be of no use in an emergency situation if it has remained with banks.
A banker, who did not wish to be named, said that several individuals are withdrawing cash to meet any urgent cash requirements in case of a health emergency in the current times.
The public, having last year's lockdown measures as their experience, wish not to take another chance, said an expert. Last year also saw a jump in currency with the public.
Between March and June 2020, the currency with a public shot up by Rs 3.07 lakh from Rs 22.55 lakh crore in the fortnight ended Feb 28 to Rs 25.62 lakh crore in the fortnight ended June 19, 2020. Between March and June 2020, people withdrew cash heavily from bank branches and ATMs in the wake of lockdown and as dependence on cash transactions rose.