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NEW DELHI : Cash continues to dominate the Indian economy despite the soaring popularity of digital payments and record UPI transactions. An average ATM in India was replenished with 1.35 crore of cash per month in FY23 by India’s largest cash management company CMS Info Systems, with the figure rising 10.1% from FY22, data shared with Mint showed.

Replenishments were particularly strong in the festival months and states such as Karnataka, Chhattisgarh and Andhra Pradesh, according to CMS Info Systems, which has a 46% share in ATM cash management.

While data released by the Reserve Bank of India, such as currency in circulation and ATM withdrawals, may show the real pulse of the economy, ATM cash replenishments could also be an important yardstick to gauge the country’s economic health.

Graphic: Mint
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Graphic: Mint

The company’s data aligns with RBI data, according to which the value of cash withdrawals at ATMs grew nearly 6% in FY23, with over 4,000 ATMs being added. While catering to the growing demand in the economy, higher ATM cash replenishments—to service higher cash withdrawals—can also be attributed to higher inflation during the year. A quarterly comparison revealed a much sharper average growth (25%) in monthly replenishment per ATM during the June-ended quarter of 2022 due to base effect, as average replenishments had dipped to just 97 lakh per ATM in May 2021 during the second wave of the pandemic.

Replenishments gradually picked up in the following months with growing signs of recovery and gathered further steam during festivities and the wedding season between October and December in both years.

“Culturally, there is a long-standing tradition of gifting cash during festivals and weddings, and the higher-than-usual ATM cash replenishments endorse the societal behaviour along with increased usage of cash for shopping during the festive and wedding seasons," said Rajiv Kaul, chief executive of CMS Info Systems.

Cash utilization levels across 23 states whose data was collated exhibited an interesting trend. Eleven states had a higher average cash replenishment per ATM than the national average in FY23. Karnataka led with 1.73 crore per month, followed by Chhattisgarh and Andhra Pradesh with average cash replenishment of 1.58 crore and 1.57 crore, respectively. By size, the top five state economies together accounted for 43.1% of the total ATM cash replenished by CMS Info Systems across the country.

Further, tracking the changes in replenishment in the last two years across these regions highlighted another noteworthy trend.

Delhi topped the charts with 23.8% growth in cash replenishments last fiscal, the only north Indian state in the top five list. Southern states Karnataka, Tamil Nadu and Kerala took the second, third and fourth spots, with 18.1%, 15.8% and 14.7% growth. Maharashtra came fifth with 13.7% growth in cash replenishments.

Bihar and Jharkhand also found berths in the top ten. Only three states—Madhya Pradesh, Chhattisgarh and Jammu and Kashmir—witnessed a decline in ATM cash replenishments last fiscal.

Overall, the cumulative cash replenishment by CMS Infosystems through the year increased by 16.6%, but the exact value was unavailable.

While digital payments have changed how the country transacts, factors such as an unbanked population, cultural influences, infrastructure challenges, and a slower pace of financial and digital literacy still keep cash relevant.

Niti Kiran
Niti Kiran is a data journalist who really likes data. With over 10 years of experience in corporate and market research, she has an eye for detail. Data research is Niti's forte and constantly fascinates her.
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Updated: 23 May 2023, 11:17 PM IST
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