As per the RBI's weekly supplement report, for the week ended May 22, 2020, Indians amid the uncertainty posed by the pandemic were hoarding cash like never before. And for the week under review it stood at Rs. 25 trillion, up from Rs. 23.5 trillion as against the week ending March 31.
Even as the demonetization gave way to digital transactions at a remarkable rate, cash remains to be a substantial asset, with increasing use even now and that too at a significant pace.
Also, since the demonetization i.e. in a span of 3 years, the currency with the public has gone higher by Rs. 8 lakh crore and that is too an extent by the lockdown.
And amid all the panic due to coronavirus, maintaining high liquidity by keeping more cash is being considered the safest norm when confidence has fallen to very low among Indian community even as business operations across verticals have resumed.
Also, as a recent development to curb increasing usage of cash, RBI launched the Payments Infrastructure Development Fund (PIDF) and towards it the apex bank will deploy Rs. 250 crores and the remainder shall be contributed by card networks as well as card-issuing banks.