In April, the month of complete nationwide lockdown, overall payments suffered a blow. According to RBI data, cash withdrawals from ATMs fell to Rs 1.28 lakh crore when compared to Rs 2.51 lakh crore in March. In February, Rs 2.86 lakh crore was withdrawn at ATMs.
The impact of the lockdown on slowing economic activity was also seen in other modes of payments.
Total retail payments made in April in India were Rs 19.66 lakh crore, compared to Rs 36.03 lakh in March and Rs 32.88 lakh in February.
Total digital payments in April were Rs 82.46 lakh crore, against Rs 150.85 lakh crore in March and Rs 116.19 lakh crore in February.
It is likely that due to uncertainty induced by the coronavirus pandemic, consumers lowered spending and postponed large spending plans. Further, due to restrictions on e-commerce, limited only to home deliver products that came under the "essential commodities" category, purchase or shopping options for consumers were scarce.
A recent Economic Research report from the State Bank of India showed that after four phases of the nationwide lockdown, deposit transactions were rising, indicating a lower appetite for consumption.