The Covid-19 pandemic has not only affected the tech sector, which we have been fervently covering since the past few months but also has shown massive blow to not just the Indian economy but also the world economy.
The number of patients being detected with coronavirus has shown exponential growth in the country, which has fueled everyone with different measures of concern. In view of this, complete lockdown has been announced in India till 14 April.
This has resulted in people withdrawing huge sums of money from banks in anticipation of emergency.
Banks Record the Highest Cash Debit in 16 Months
With coronavirus leading to people taking different emergency measures, like stocking up their grocery items, medicines, personal hygiene items and more, there is another such area where people are rather invested in multitudes.
In the fortnight ending on March 13, depositors have withdrawn cash worth Rs 53,000 crore from banks. This is the highest cash withdrawal figure recorded in the last 16 months.
According to the Reserve Bank of India (RBI), such large withdrawals by depositors occur only during festivals or elections.
The central bank said that it has issued huge amounts of cash in the last 15 days. As of March 13, the people had a total currency of Rs 23 lakh crore.
The Reason for Mushrooming Withdrawals
According to economists, even though digital transactions have increased, the caution and fear factor dominates in the wake of such emergencies.
Axis Bank Chief Economist Saugata Bhattacharya says that people are worried about whether they would be able to access banks and ATMs during the lockdown, leading to panic withdrawals of such huge amounts.
We have come to know that due to coronavirus pandemic fears, banks are asking people to adopt online methods for transactions such as net banking, UPI, etc.
However, since online ecommerce giants like Flipkart and Amazon have limited delivery service, people are coming out and preferring offline shopping more.
They are in need of cash for this. The ones buying groceries and other necessities online are now buying from local shopkeepers.
What Does RBI Governor Have to Say?
The Governor of our central bank, RBI, Shaktikanta Das has addressed the concerns of depositors on Friday, saying that the banking system of the country is completely safe and strong.
The decline in shares of banks due to the fall in the stock market will not have any effect on their financial system.
He also urged depositors not to panic and withdraw money from banks. Depositors’ money in both public and private banks is completely safe.
He has appealed people to adopt more digital transactions amid such times. This situation has become more panicking and fearsome than 2016 demonetization, where people had to stand out of ATM for their own money even during the nights of cold & chilly winters at 11-12 midnight.