Robust coexistence: Despite a rise in digital payments, India's cash usage grows

CMS Info Systems releases the CMS India Cash Vibrancy Report 2023.

CMS Info Systems Limited (CMS), offering banking logistics and technology services, unveiled the 'CMS India Cash Vibrancy Report 2023' yesterday. This comprehensive industry report sheds light on cash usage by consumers and showcases the coexistence of cash and digital payments in the country. The findings are based on CMS's proprietary CMS Cash Index™ (CCI). 

Key highlights from the report include 

Global Cash Usage: While the United Kingdom recorded the highest annual growth of 11.8 per cent and China followed closely with 10.2 per cent, India's cash in circulation (CIC) to GDP ratio has remained consistently higher than the 10-year average, averaging close to 12.4 per cent since touching 8.7 per cent in 2016. 

ATM Cash Replenishments: CMS Info Systems witnessed an impressive annual growth of 16.6 per cent in pan-India ATM cash replenishments during FY 2023. 

ATM Cash Withdrawals: March 2023 witnessed a remarkable absolute growth of 235.0 per cent in ATM cash withdrawals, amounting to Rs 2.84 lakh crore, within 76 months after the demonetization event. 

Regional Insights: Maharashtra, Gujarat, Tamil Nadu, Karnataka, and Uttar Pradesh collectively accounted for 43.1 per cent of the total ATM cash replenished by CMS Info Systems across the country during FY 2023. Significantly, these states also ranked as the top five with the maximum gross state domestic product (GSDP) in FY 2022, according to MoSPI. 

State-level Performance: Karnataka emerged as the state with the highest average cash replenishment per ATM at Rs 1.73 crore in FY 2023, representing an 18.1 per cent increase compared to FY 2022. Chhattisgarh secured the second position with a cash replenishment of Rs 1.58 crore in FY 2023, experiencing a marginal decline of 2.1 per cent from FY 2022. 

Seasonal Cash Demand: The festive and wedding seasons between October and December of FY 2022, as well as October, December, and March of FY 2023, witnessed the highest cash usage and demand in India. Notably, key industry sectors such as Transportation, Organised Retail, and Banking & Financial Services (BFSI) experienced annual increases of 38.7 per cent, 14.4 per cent, and 5.6 per cent, respectively, in average cash collected from Retail Cash Management (RCM) points during FY 2023. 

Post-Pandemic Recovery: The report demonstrates the gradual recovery of the economy from the COVID-19 pandemic. The Transportation sector showcased a remarkable 1.4 times higher average cash collection per RCM point, increasing from Rs 1.49 crore in FY 2022 to Rs 2.06 crore in FY 2023. 

The CMS India Cash Vibrancy Report 2023 thus shows that cash remains an integral part of the economy.