<p>In what seems to be a panic reaction to the lockdown, people across the country appear to be stocking up on cash. </p>.<p>According to a <span class="italic">DH</span> analysis of data available with the Reserve Bank of India (RBI), currency with people has increased by Rs 1.35 lakh crore (6%) since the collapse of the private sector lender Yes Bank in early March.</p>.<p>Currency with the public stood at Rs 23.91 lakh crore as on April 10, 2020, compared to Rs 22.56 lakh crore at the beginning of March.</p>.<p>Yet another data point shows that the absolute increase in currency with the public in the first 10 days of the current financial year has been 25% more than what it was the previous year, jumping by Rs 41,583 crore compared with Rs 33,395 crore in the corresponding quarter last year till April 10 on a year-to-date basis.</p>.<p>Currency with the public is arrived at after deducting cash with banks from total currency in circulation.</p>.<p>Analysts say people started hoarding cash more after the lockdown period was announced -- which can be explained by the decrease in the demand deposits since March 27, according to RBI data.</p>.<p>"There is much to do with the lockdown. Given the uncertainty, people would want to keep money with them," says Kavita Chacko of CARE Ratings.</p>.<p>This is explained by the sudden drop of Rs 1.36 lakh crore in the demand deposits since March 27, around the same time the lockdown was announced.</p>.<p>Despite this, the banks are flush with the funds, primarily because of investors moving the money towards time deposits. </p>.<p>The time deposits -- which are considered usually low-risk, low-return asset classes -- have seen a surge in the inflows as investors are averse to investing in the equity markets -- which have been plagued by the bear.</p>.<p>The RBI data shows that since March beginning, inflows into time deposits have surged by Rs 3.69 lakh crore (3%) to Rs 129.59 lakh crore.</p>
<p>In what seems to be a panic reaction to the lockdown, people across the country appear to be stocking up on cash. </p>.<p>According to a <span class="italic">DH</span> analysis of data available with the Reserve Bank of India (RBI), currency with people has increased by Rs 1.35 lakh crore (6%) since the collapse of the private sector lender Yes Bank in early March.</p>.<p>Currency with the public stood at Rs 23.91 lakh crore as on April 10, 2020, compared to Rs 22.56 lakh crore at the beginning of March.</p>.<p>Yet another data point shows that the absolute increase in currency with the public in the first 10 days of the current financial year has been 25% more than what it was the previous year, jumping by Rs 41,583 crore compared with Rs 33,395 crore in the corresponding quarter last year till April 10 on a year-to-date basis.</p>.<p>Currency with the public is arrived at after deducting cash with banks from total currency in circulation.</p>.<p>Analysts say people started hoarding cash more after the lockdown period was announced -- which can be explained by the decrease in the demand deposits since March 27, according to RBI data.</p>.<p>"There is much to do with the lockdown. Given the uncertainty, people would want to keep money with them," says Kavita Chacko of CARE Ratings.</p>.<p>This is explained by the sudden drop of Rs 1.36 lakh crore in the demand deposits since March 27, around the same time the lockdown was announced.</p>.<p>Despite this, the banks are flush with the funds, primarily because of investors moving the money towards time deposits. </p>.<p>The time deposits -- which are considered usually low-risk, low-return asset classes -- have seen a surge in the inflows as investors are averse to investing in the equity markets -- which have been plagued by the bear.</p>.<p>The RBI data shows that since March beginning, inflows into time deposits have surged by Rs 3.69 lakh crore (3%) to Rs 129.59 lakh crore.</p>
