The report stated that industries, such as logistics and jewellery, had seen the biggest increase in usage over the past two years, while e-commerce and banking have seen the sharpest fall.
The report by CMS tracked what is known as the CMS Cash Index from April 2016 to December 2019. The CMS Cash Index is a weighted index comprising three factors – cash in circulation, cash handled in the company’s ATM, and retail cash management channels. “Our analysis is based on 2,300 locations in India; these cover 98 per cent of the districts and 11,090 pin codes,” CMS said in the report. The index topped at 120 last December, at levels even above October 2016.
“We see a 16 per cent increase in cash demand through ATM channels over the last two years. States having high per capita cash withdrawals are the ones with high economic development, namely Delhi, Tamil Nadu, Punjab, Karnataka, etc. States having low per capita cash withdrawals are typical BIMARU states – Bihar, Rajasthan, Madhya Pradesh, Uttar Pradesh, etc,” the report stated.
“States with the fast pace of growth in cash withdrawal are Assam, Chhattisgarh, and Kerala, while states with the slow pace of growth in cash withdrawal are Tamil Nadu, Maharashtra, and Bihar, the report stated. It said that festive seasons continue to see a 15-20 per cent spike in cash withdrawals. The report said that industries with high-cash usage included jewellery, tolls and highways, utility, and petroleum, while those with low-cash usage included footwear, durables, and telecom.