Fear of extending lockdowns is leading to cash withdrawals at a faster pace, the currency held by the public jumped by over ₹30,000 crore for the 2-week period ended April 9, as per RBI data. This jump is equal to the withdrawal number for the two months of December and January combined. Cash holding with the public now is at a record high of ₹27.8 lakh crore.
A rise in uncertainties over Covid is leading to the people preferring cash, the same phenomena was observed between March and June 2020 when people withdrew cash heavily as dependence on cash transactions rose.